ABOUT THE TEXAS QUARTERLY HOUSING REPORT
The Texas Quarterly Housing Report, compiled through the collaborative efforts of the Data Relevance Project, local REALTOR® associations, MLSs, and Texas REALTORS®, presents valuable insights into the real estate market. With thorough analysis conducted by the Texas Real Estate Research Center at Texas A&M University, this report offers comprehensive quarterly sales data encompassing Texas as well as 25 metropolitan statistical areas within the state. Notably, the Texas Real Estate Year-in-Review Report and the Texas Real Estate Mid-Year Report replace the Q2 and Q4 reports annually, providing a holistic perspective on the real estate landscape.
Texas Housing Market Experiences a Shift towards a More Balanced State between Buyers and Sellers
The housing market in Texas has undergone a notable transformation, transitioning into a more equitable state where buyers and sellers are finding greater parity and equilibrium in their transactions. This shift indicates a positive development for both parties involved, as it fosters a healthier and more stable marketplace.
Increased Inventory Presents Buyers with an Array of Choices and Opportunities
An encouraging trend in many markets across Texas is the noticeable surge in available inventory, which suggests that prospective buyers now have a wider range of options to consider. This influx of inventory presents an advantageous scenario for buyers who seek to find their ideal property amidst a growing pool of potential selections. However, it's worth noting that despite this increase, the months of inventory—a metric used to determine the time required to sell the existing supply of homes at the current pace of sales—has reached an unprecedented low for the first quarter of the year, excluding the unusual circumstances experienced in 2020 and 2021. Therefore, while the Texas market's inventory is in the process of recovery, it has not yet reached a historically normal level.
Market Pace Exhibits a Moderate Shift with Extended Listing Periods and Decreased Closed Sales
An intriguing development within the Texas housing market is the discernible moderation in its overall pace, as evidenced by two key factors. Firstly, there has been an observable increase in the duration homes spend on the market before being sold. This extended listing period indicates a more deliberate approach from both buyers and sellers, potentially leading to a more thoughtful and considered decision-making process. Secondly, there has been a noticeable decline in the number of closed sales, suggesting a slowdown in transactional activity. These combined indicators point towards a market that is currently in a phase of moderation and adjustment, with participants exercising greater caution and deliberation in their real estate endeavors.
Mortgage Rates Influence Sales and Buyer Affordability, Nudging Market Dynamics
Recent fluctuations in mortgage rates have had a discernible impact on the Texas housing market, affecting both the buying and selling sides of transactions. Over the past year, mortgage rates have risen by approximately 1.4%, which subsequently influences the size of loans that many buyers can comfortably afford. As a result, some potential buyers may face constraints when it comes to their purchasing power, potentially leading to a decrease in sales activity. Additionally, homeowners who are not compelled to move may exhibit hesitance in selling their properties if their existing mortgage rates are significantly lower than the prevailing rates in the market. This confluence of factors related to mortgage rates serves as a contributing element in the current dynamics of the Texas housing market.
Strong Demand Continues to Drive Incremental Growth in Texas Median Home Price
Despite various market dynamics at play, the Texas housing market continues to demonstrate robust demand for residential properties, as reflected in a modest 0.6% increase in the median home price during the first quarter of 2023 compared to the same period in the previous year. This persistent demand signifies that there is still a considerable appetite for housing within the state, even as the inventory levels experience a gradual recovery. Essentially, while there has been an increase in available inventory, its magnitude has not yet reached a significant enough level to outweigh the prevailing demand, indicating that the Texas market remains highly sought after by prospective homebuyers.