Texas Housing Market Trends in 2024: Stability Amidst Change
Home to a booming economy and a dynamic business scene, Texas has become a magnet for homebuyers across the nation. Traditionally known for its affordability, the Texas housing market is currently experiencing a period of transition. Despite this, the market is demonstrating resilience and gradual improvement in 2024.
How is the Texas Housing Market Doing in 2024?
Texas Home Sales
The Texas housing market showed a significant rebound in April 2024 following a decline in March. Seasonally adjusted housing sales have increased, driven by a rise in new listings for the fourth consecutive month. This recovery resulted in 29,212 homes sold on a seasonally adjusted basis, marking a 5.9% increase month over month (MOM).
• San Antonio saw the highest recovery among major cities with an 8% increase in home sales, bouncing back from a 9.2% decline.
• Dallas experienced a 4% increase in home sales.
• Other major cities also saw slight increases in sales.
This upward trend in home sales indicates strong demand for housing across Texas, supported by a robust labor market and economic strength.
Texas Home Prices
Despite fluctuations in sales, home prices in Texas have remained stable. The median home price in the state has held steady at approximately $340,000 for two consecutive months.
• Austin experienced a notable increase of 5.1% in home prices, with the median price rising from $421,572 to $443,247.
• Houston saw a 2.1% increase in home prices.
• Dallas had a modest 0.7% increase.
• San Antonio was the only major city to experience a decline in home prices, falling by 0.9%.
The Texas Repeat Sales Home Price Index (Jan 2005=100) also showed positive growth, increasing by 0.9% MOM and 2.6% year over year (YOY).
Texas Housing Supply
The supply of housing in Texas has been on the rise, contributing to the stabilization of the market.
• The number of active listings increased from 106,428 to 111,707, a 4.9% increase.
• New listings have been increasing steadily from December to April, with a total of 47,000 new listings in April 2024.
Among the Big Four cities:
• Dallas saw a decline in new listings over the past two months, currently at 11,523 new listings.
• Austin experienced a significant increase of 25% in new listings between January and April.
• Houston added 2,788 listings (a 10.7% increase), almost five times that of the previous month.
• San Antonio saw a modest increase of 2%.
The average days on market remained unchanged at 57 days. However, variations among major cities were observed:
• Austin decreased by almost four days.
• Dallas increased by less than one day.
• San Antonio experienced an increase of just over three days, now having the highest days on market at 72 days.
• Houston had the lowest days on market at 46 days.
Key Trends Shaping the Texas Housing Market in 2024
Rising Interest Rates
Treasury and mortgage rates have been increasing since the start of the year, although they remain below their peak 2023 levels.
• The average ten-year U.S. Treasury Bond yield rose by almost 33 basis points to 4.54%.
• The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate rose by 17 basis points to 6.99%.
Single-Family Starts Declining
• The number of single-family construction permits increased by 0.9% MOM, reaching 13,805 issuances.
• Construction starts decreased by 15.1% MOM to 13,731 units, partly due to strong performance in February signaling an early start to the construction season.
Economic Strength and Housing Demand
Texas’ robust labor market and economic strength continue to support housing demand. Residential mortgage activity is improving as more pre-approved customers search for homes, despite higher mortgage interest rates. Financial vulnerability, such as rising credit card delinquencies, is concentrated on the lower end of the income distribution, somewhat shielding the home-purchase market but impacting housing affordability.
Housing Affordability
While the housing market is stabilizing, persistent higher mortgage rates and economic factors have broader implications for housing affordability. Households at the lower end of the income distribution are less likely to be prospective homebuyers, affecting overall market dynamics.
Texas Housing Market Predictions
The average Texas home value is $306,756, up 1.0% over the past year, and homes are going to pending in around 23 days. The median sale price as of April 2024 was $331,508, indicating that half of the homes sold during that period were priced above this figure and half below. The median list price was $365,177.
• Percent of sales over list price: 18.8%, indicating a competitive market with strong demand.
• Percent of sales under list price: 59.3%, suggesting a buyer’s market in some areas.
Conclusion
The Texas housing market in 2024 is poised for a period of transition. While the breakneck pace of the recent past may slow, the underlying fundamentals remain strong. Affordability will be a key concern, and those with a long-term view will likely find the most success. Staying informed about local market trends and seeking professional guidance from real estate agents will be crucial for navigating this housing market.
