The Texas housing market, once a beacon of growth and opportunity, is now showing signs of a significant slowdown. After a period of rapid price increases and an influx of new residents during the pandemic, cities like Austin and Dallas are experiencing falling home prices and a growing number of residents choosing to leave the state.
During the pandemic, Texas became a hotspot for new residents seeking affordable living compared to other metropolitan areas. The median home price in Texas surged by 37% from March 2020 to August 2023, reaching $348,300. However, this rapid increase has led to a decline in affordability, prompting many to reconsider their decision to move to the Lone Star State. Also according to our mortgage rates tracker we see declining in mortgage rates, but current interest rates in Texas as still high and this is the biggest factor that drives sales.
Recent data indicates a shift in migration patterns. While Texas gained 668,000 new residents between 2021 and 2022, it also saw nearly half a million people leave the state. Notably, cities like Austin and Dallas are experiencing population declines, with Austin ranking as the fifth most moved-out city in the U.S. in 2023.
The once-booming housing market is now facing a downturn. Median home prices in Texas have fallen approximately 7% from their mid-2022 highs. Real estate agents report that homes are taking longer to sell, with some sellers needing to reduce prices by 20% to 30% to attract buyers. In August, over a third of homes in Texas experienced price drops.
Several factors contribute to the cooling housing market:
Experts suggest that the Texas housing market may be approaching a bottom, but the future remains uncertain. While some areas still attract new residents, the overall trend indicates a cooling market. The combination of high home prices, rising living costs, and a weakening job market could continue to deter potential movers.
As former residents like Peter Hoholick and Samuel Cobb express their frustrations with the current living conditions, it becomes clear that the allure of Texas is fading for many. With the housing boom seemingly over, the state faces the challenge of regaining its appeal to both current and prospective residents.