Texas' housing market is experiencing a downturn as both home prices and sales have dropped significantly. The cities of Dallas and Austin have been particularly affected, with notable year-over-year declines in median sale prices and pending sales.
In the four weeks ending July 14, Dallas and Austin experienced the most significant year-over-year drops in home prices. Dallas saw a 2.3 percent decrease, while Austin followed closely with a 2.1 percent drop. These declines come after a period of rapid price increases during the COVID-19 pandemic, driven by an influx of out-of-state buyers and the rise of remote work.
The growth in housing inventory has been a key factor in the market's downturn. In June, Texas had 156,743 homes for sale, a 22.4 percent increase year-over-year. However, the number of newly listed homes slightly decreased by 0.64 percent. This imbalance between supply and demand has allowed buyers to be more selective, leading to longer listing times and more price reductions.
High mortgage rates, hovering around 7 percent, have also played a role in the market's slowdown. With more options available and higher borrowing costs, buyers are taking their time to make decisions. Homes listed for sale now spend an average of 42 days on the market, up 8 days from the previous year.
Houston has faced its own set of challenges, with pending sales falling by 24.4 percent year-over-year in the four weeks ending July 14. The city also saw a 6.6 percent decrease in new listings. Despite these challenges, home prices in Houston remain relatively high, with a median sale price of $349,000 in June, up 2 percent year-over-year.
The Texas housing market is currently in a state of flux, with increased inventory and high mortgage rates in Texas contributing to a slowdown in both prices and sales. While some cities like Dallas and Austin are seeing significant declines, others like Houston are experiencing mixed results. Buyers and sellers alike will need to navigate these changing dynamics carefully in the coming months.