In March, there’s significant news across all reported counties: new and active listings have surged, particularly notable spikes seen in Collin and Denton counties. Despite this uptick in listing activity, inventory remains tight, with less than three months’ worth available.
Closed sales in Collin, Dallas, Denton, Rockwall, and Tarrant counties have seen an almost 10% increase each, except for Rockwall County, where there’s a notable decline of nearly 40% compared to the previous year. Additionally, noteworthy is the decrease in days on market across all counties except Dallas, where it has risen by almost 5% compared to last year.
Given the inventory challenges, it’s unsurprising that average sales prices have edged up slightly from the previous year, with increases of less than 5% across most counties. However, Dallas County stands out with a significant 14.9% jump in average sales price compared to 2023.
Even still, the spring and summer market is upon us and given that the DFW Metroplex is in the top 10 of people moving here, so it promises to be a busy selling season!
Our stats infographics include a year over year comparison and area highlights for single family homes broken down by county. We encourage you to share these infographics and video with your sphere.
Housing sales rebounded from last month’s drop despite mortgage rates remaining at elevated levels. The average home price grew alongside sales, with the cost rising over $9,000 since December 2023. Single-family starts decreased while permits increased.
Home Sales Skyrocket
According to the latest data, Texas had a 14.6 percent increase in total home sales month over month (MOM), resulting in 29,209 homes sold (Table 1). Notably, all major cities in Texas experienced an upswing in housing sales compared to fourth quarter 2023. The most significant increase was in Houston (37.3 percent) with a remarkable surge of over 2,000 additional sales compared to December. The rest of the Big Four experienced strong monthly gains of over 10 percent.
The state’s average days on market remained unchanged with both Dallas and Houston hovering at 50 days for the second consecutive month. Both Austin (74 days) and San Antonio (64 days) recorded decreases, falling by four and three days, respectively.
Statewide active listings rose slightly to 105,475. For the second straight month, San Antonio (12,542) was the only one of the Big Four to post a monthly increase at 2.4 percent. Austin had the largest drop in active listings with a 2.4 percent loss to 8,109. Dallas (22,008) and Houston (24,699) had reductions of less than half a percent.
The state’s new listings rose to 43,817 in January. All four major metros posted monthly increases with San Antonio leading the way at 14 percent. Houston also had a strong increase of 9 percent. Amid the rise in active listings, the months of inventory (MOI) increased to 3.7. Dallas fell from 3.1 to 2.7 since November.by 0.5 percent in January.
Mortgage Rates Remain Below Peak Values
Treasury and mortgage rates remain below their elevated 2023 levels as the ten-year U.S. Treasury Bondyield rose four basis points to 4.06 percent. However, the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate rose 18 basis points to 6.64 percent.
Permits Rise, Starts Unchanged
Texas’ single-family construction permits increased 1.8 percent MOM to 12,723 issuances. Dallas continued its fall from last month, dropping 2.6 percent to 3,415 starts while Houston experienced a minor fluctuation of less than 1 percent. Austin and San Antonio reported strong increases of 7.9 and 14.3 percent, respectively.
Construction starts fell alongside permits, according to data from Dodge Construction Network. Single-family starts decreased 1 percent MOM to 11,908 units. Austin reported the only monthly increase among the Big Four, rising just shy of 2 percent. Houston (1.3 percent) and San Antonio (0.5 percent) moderated. Dallas starts plummeted in January, falling 22.1 percent to 2,537 starts.
The state’s total single-family starts value climbed from $2 billion in January 2023 to $2.7 billion in January 2024. Houston accounted for a third of the state’s total starts value. Starts activity is up from last year as Austin and San Antonio posted moderate increases.
Home Price Changes Mixed after Last Month’s Plunge
The state’s median home price rose 2.8 percent, reaching $341,840 (Figure 1). Among the major metropolitan areas, Houston and Dallas recorded the only increases, with 3.3 percent and 1 percent, respectively. Conversely, San Antonio saw home prices decline by 4.3 percent, which was the lowest among the Big Four. Notably, Austin had previously experienced the most significant price surge of 4.2 percent, but median prices decreased by 0.5 percent in January.
The majority of sales fall into the $200,000-$300,000 and $300,000-$400,000 price range cohorts, accounting for 27 and 25 percent of total home sales, respectively.
The Texas Repeat Sales Home Price Index (Jan 2004=100) grew 0.3 percent MOM and remains 2.6 percent higher year over year. Austin’s annual appreciation remains well below the states average, falling to 3.2 percent.
When navigating the world of insurance, it’s important to know the difference between title insurance and homeowners insurance.
As a crucial aspect of homeownership, insurance plays a pivotal role in safeguarding your investment and providing peace of mind. For many homeowners, understanding the nuances between various insurance types can be daunting. At Republic Title, we frequently receive inquiries about the distinctions between title insurance and homeowners insurance. In this article, we’ll delve into the differences between these two essential forms of insurance and why they’re both vital for protecting your interests as a homeowner.
Title Insurance
Title insurance protects the homeowner and lenders against financial loss arising from defects in the property’s title or ownership rights. These defects could include undisclosed liens, encumbrances, errors in public records, or even fraudulent claims to the property. Unlike other forms of insurance that protect against future events, title insurance insures against events that occurred or liens that were filed before the date of the policy.
Before a title commitment and policy can be issued a title company searches the property records to uncover any existing issues with the title, but even the most thorough title search may fail to uncover certain hidden defects. Title insurance provides a safeguard against these unforeseen issues.
There are two types of title insurance policies: Owner’s Policies and Loan Policies. An Owner’s Policy protects the homeowner’s ownership rights and remains in effect for as long as the homeowner or their heirs maintain an interest in the property. A Loan Policy ensures that the lender (if there is one) has a valid lien on the property and protects the lender’s interests in the property for as long as the lender’s mortgage is outstanding.
Title insurance premiums, which are regulated and set by the Texas Department of Insurance, are a one-time fee typically paid at the time of closing. In the event of a covered title defect, the title insurance policy will provide financial protection that includes, but is not limited to legal fees, settlement costs, and any loss in property value.
Before a home purchase can get the clear to close, it must make it through many hurdles. Republic Title has skilled staff available every step of the way.
Homeowners Insurance
Homeowners insurance, on the other hand, is a type of property insurance that provides financial protection against damage to the home and its contents, as well as liability for injuries or property damage caused by the homeowner or their family members. Unlike title insurance, which focuses on the property’s title, homeowners insurance primarily covers physical damage and liability risks associated with homeownership.
Homeowners insurance policies typically provide coverage for a wide range of perils, including fire, theft, vandalism, windstorm, hail, and water damage (excluding floods and earthquakes, which usually require separate coverage). In addition to damage to the physical structure of the home, homeowners insurance may also cover personal belongings such as furniture, clothing, and electronics.
In the event of a covered loss, homeowners insurance will reimburse the homeowner for repair or replacement costs, up to the policy’s coverage limits. Most homeowners insurance policies also include liability coverage, which protects the homeowner against lawsuits arising from bodily injury or property damage suffered by others while on the insured property.
Homeowners insurance premiums are typically paid on an annual basis. The cost of homeowners insurance will vary between insurance companies and due to factors such as the home’s location, construction materials, and the homeowner’s claims history. To ensure adequate coverage, homeowners should regularly review their insurance policies and adjust their coverage limits as needed to account for changes in property value or personal belongings.
Key Differences:
Coverage Focus: Title insurance focuses on protecting against defects in the property’s title, while homeowners insurance primarily covers physical damage to the home and personal belongings, as well as liability risks.
Nature of Risks: Title insurance protects against past events or defects in the title, while homeowners insurance protects against future events such as fire, theft, or liability claims.
Payment Structure: Title insurance premiums are typically paid as a one-time fee at the time of closing, whereas homeowners insurance premiums are paid annually or in installments.
Duration of Coverage: Title insurance remains in effect for as long as the homeowner or their heirs maintain an interest in the property, while homeowners insurance policies are typically renewed annually.
Coverage Limits: Title insurance coverage is based on the property’s purchase price, while homeowners insurance coverage limits can be adjusted to reflect changes in property value or personal belongings.
In conclusion, while both title insurance and homeowners insurance are essential for protecting homeowners’ interests, they serve different purposes and cover different aspects of homeownership. By understanding the differences between these two types of insurance, homeowners can ensure comprehensive coverage for their property investments.
When it comes to purchasing a home, the excitement of finding the perfect property can often overshadow the importance of ensuring the title is clear and free of any disputes. Yet, overlooking this crucial step can lead to significant financial and legal ramifications. This is where title insurance steps in as a guardian of your investment, providing assurance and protection against unforeseen risks. In this Republic Title Tip, we delve into the significance of title insurance for homebuyers, shedding light on why it’s an indispensable aspect of the real estate transaction process.
What Is Title Insurance?
First and foremost, let’s unravel the concept of title insurance. In essence, title insurance is a specialized type of insurance that indemnifies homeowners against loss arising from defects in the title or ownership of a property.
Unlike other forms of insurance that protect against future events, title insurance is a one-time premium and focuses on mitigating risks associated with past events that may affect the property’s legal ownership.
Why Is Title Insurance Necessary?
Consider this: When purchasing a home, you’re not just acquiring the physical structure and land. You’re also buying the legal history.
By conducting a comprehensive title search, title insurance companies unearth any potential clouds on the title, such as unpaid taxes, liens, undisclosed heirs, or unresolved legal disputes. If an issue arises after purchase, title insurance provides coverage for loss, costs, attorney’s fees, and expenses, thereby shielding homeowners from financial liabilities that could otherwise jeopardize their investment.
Title Insurance for Ownership Disputes
One of the primary risks title insurance protects against is the threat of ownership disputes. Imagine purchasing your dream home, only to discover months or even years later that another party has a legal claim to the property.
Such scenarios can arise for various reasons, including errors in public records, forged documents, or undisclosed heirs asserting their rights to the property. Without title insurance, resolving these disputes can entail lengthy and costly legal battles, potentially resulting in the loss of your home and investment.
Title Fraud, Errors, and Property Easements
Moreover, title insurance also guards against title defects that may arise post-purchase. These defects can range from errors or omissions in the title documentation, fraud, or forgery, to someone else having an easement on your property, or no access to your property. Without adequate protection, homeowners could find themselves facing substantial financial burdens to rectify these issues or even risk losing their property altogether.
Republic Title understands the significance of title insurance in safeguarding their clients’ investments. As a trusted resource and industry expert, they go above and beyond to ensure your real estate transactions are conducted with the utmost diligence and integrity. Their team of experienced professionals conducts thorough title searches, leveraging technology and industry expertise to identify and mitigate any potential risks to your investment.
Republic Title offers a range of title insurance policies tailored to meet the unique needs of homeowners and lenders alike. Whether you’re purchasing a new home, refinancing an existing mortgage, or conducting a commercial real estate transaction, Republic Title can provide comprehensive coverage and exceptional service at every step.
Title insurance is not just another box to check off during the home-buying process — it’s a critical safeguard covering title risks. By partnering with Republic Title, you can trust your real estate transactions are in expert hands, backed by decades of industry experience and a commitment to excellence.
Despite mortgage rates continuing to fall from their elevated level, housing sales haven’t rebounded. The average price has fallen alongside home sales, with homes costing $2,000 less than in November. Single-family starts increased while permits moved downward. Homes sat on the market for longer in December as average days on market reported its first increase since the beginning of the year.
Home Sales Fall Alongside Listings
Mortgage rates continued to fall, but their elevated level remains problematic for homebuyers as Texas’ total home sales fell 1.9 percent month over month (MOM) to 25,430 (Table 1). Among the Big Four, San Antonio reported the only gain in home sales, jumping 7.1 percent to 2,684. Houston’s home sales decreased by 16.6 percent, losing over 1,000 sales in December. Austin and Dallas also experienced losses, falling by 9.2 percent and 3.5 percent, respectively. The gap between Houston and Dallas widened as Houston reported poor monthly sales. Despite rates falling, they remain elevated, resulting in an affordability problem for homebuyers.
The state’s average days on market (DOM) climbed to 57, marking the first increase since April. This increase suggests longer listing times could be approaching. All four of the major metros experienced increases in DOM with Houston (50 days) and Dallas (49 days) rising by seven and four days, respectively. Austin (77 days) and San Antonio (68 days) had minor fluctuations from the previous month.
Housing supplies remained elevated, but active listings fell for the first time since May, falling to 103,395 listings. San Antonio (12,254) was the only one of the Big Four to post a monthly increase at 1 percent. Austin had the largest drop in active listings with a 13.3 percent loss to 8,307 listings. Dallas (22,056) and Houston (24,770) had moderate reductions. Despite the fall in active listings in December, levels are still on pace with 2019.
The state’s new listings fell 1.89percent to 42,658 in December. All four of the major metros posted monthly decreases of between 2 and 4 percent. Austin had a 2 percent decrease to 3,766 listings while San Antonio had the largest decrease at 4 percent. Amid the fall in active listings, the months of inventory (MOI) experienced a small decrease to 3.6 with Austin contributing heavily to the fall, dropping over 10 percent.
Mortgage Rates Continue to Plunge
Treasury and mortgage rates continued to fall amidst rumors of interest rate hikes being finished. The ten-year U.S. Treasury Bondyield fell 48 basis points to 4.02 percent. Likewise, the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate fell 62 basis points to 6.82 percent. If rates continue to fall into the start of 2024, housing affordability should improve.
Permits Unchanged, Starts on the Rise
Texas’ single-family construction permits moderated just shy of a quarter of a percent decrease from November, falling to 12,392 issuances. Dallas and San Antonio had monthly dips falling 5.3 percent and 12.9 percent, respectively. Houston and Austin both experienced minor fluctuations of less than ten issuances.
Construction starts grew while construction permits remained effectively unchanged, according to data from Dodge Construction Network. Single-family starts increased 2.5 percent MOM to 12,222 units. Despite the Texas increase, San Antonio (8,08 starts) reported the only monthly increase among the Big Four, rising 20.6 percent. Austin (1,392 starts) fell 13.6 percent, making the ratio of Austin to San Antonio starts fall under the typical 2:1 ratio. Dallas (3,250 starts) and Houston (3,448 starts) continued to outperform the rest of the state, combining for 55 percent of total starts.
The state’s year-to-date total single-family starts value climbed to$29.8 billion, up from $27.7 billion in November. Starts values continued to mirror 2019 values since May, however, value fell just outside the $1 billion dollar threshold in December. Houston and Dallas accounted for over 60 percent of the state’s construction value.
Median Home Prices Fall Despite Big Four Rising
Texas’ median home price fell 0.7 percent to $332,300 (Table 2). Among the Big Four metro areas, Dallas posted the only decrease, falling by 1 percent. Austin saw the greatest price boost with a 4.2 percent gain, raising the price to its highest level since January. Home prices across the Big Four remain above pre-COVID prices.
Home prices continued to hover around $200,000-$300,000 and $300,000-$400,000, accounting for 26 and 24 percent of total home sales, respectively.
The Texas Repeat Sales Home Price Index (Dec 2004=100) fell 0.9 percent MOM but remains 2 percent up from the previous year. Houston had the highest annual appreciation at 2.6 percent YOY increase while Austin showed the lowest annual appreciation at negative 3 percent.
Source – Joshua Roberson and Koby McMeans (February 20, 2024)
When navigating complex property transactions in Texas, having a trusted partner like Republic Title can make all the difference. Republic Title has long been recognized as a reliable resource for homeowners and real estate professionals, offering invaluable insights and solutions for various issues, including the critical aspect of survey deletion coverage. In this article, we will provide a comprehensive understanding of this essential component of title insurance.
What is Survey Deletion Coverage?
Survey deletion coverage, also known as survey coverage or survey amendment, covers any errors and omissions by a surveyor. This coverage provides assurance the survey of the property is accurate, that all improvements are accurately depicted, and that the property lines are properly defined.
Equally important — what survey coverage does not insure. Survey coverage does not insure against matters, conflicts, discrepancies, or encroachments that are shown on the survey.
In a standard title policy there is an exception for “any discrepancies, conflicts, shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements.” When survey coverage is purchased, the exception is revised to read only “shortages in area” which provides the insured with significant additional coverage, as explained below.
What is Required to Obtain Survey Coverage?
To obtain survey deletion coverage in Texas, you typically need the following:
a. A current survey that accurately reflects the property lines, improvements, any easements, setback lines, or other items that are located on the property. If the Seller in a transaction has an existing survey it may be possible to use the survey as long as there have not been any changes to the property since the survey was prepared. If the Seller has an existing survey be sure to check the appropriate boxes in Paragraph 6 of the TREC 1-4 Family Contract (the “TREC contract”) and deliver the survey and the T-47 to the Buyer and Title Company within the number of days stated in the contract. The survey will be reviewed by the Title Company and must meet certain criteria and standards to be accepted. If an existing survey is not acceptable to the title company a new survey will be required, and the party responsible for that is negotiable and is set out in paragraph 6C(1) of the TREC Contract.
b. A new survey may be required in certain circumstances. If the Seller does not have a survey, if they have made changes to the property since the last survey was done, or if an existing survey is not acceptable to the Title Company, a new survey would have to be ordered. The party responsible for paying for the new survey is negotiable, and is set out in Paragraph 6C of the TREC Contract. It is important to note that a new survey cannot be prepared until the title work has been completed, so keep that in mind when calculating the number of days the parties have in Paragraph 6 to provide the new survey.
c. Request Survey Deletion Coverage: This is typically requested by checking the appropriate box in Paragraph 6A(8)of the TREC. The party who will be responsible for paying the premium for survey coverage is negotiable and can be set out in Paragraph 6A(8)(ii). The cost for survey coverage on a residential transaction is 5 percent of the basic premium. See the chart below for some examples of the cost:
Even with survey coverage, it is important to note that a Title Company will add any necessary exceptions for items disclosed on the survey thereby removing those items from coverage in the title policy even when survey coverage is provided. For example, if the survey shows that a fence encroaches on to the neighbor’s property, the Title Company will revise the title commitment to add an exception. The Buyer would have an opportunity under the TREC Contract to object to the new exception under Paragraph 6D of the TREC Contract. If no objection is made, and the Buyer purchases the property, and a dispute arises regarding the fence, it would not be covered under the Title Policy.
Why is the Phrase “Shortages in Area” Not Deleted from the General Exception?
One notable aspect of survey deletion coverage in Texas is that the phrase “Shortages in Area” is not deleted from the general exception. This phrase is included in standard title insurance policies, and it signifies that the Texas Department of Insurance prohibits title companies from insuring exact acreage. In other words, the title insurance policy does not provide coverage for discrepancies in the property’s area or size.
The reason for not deleting this phrase is to take into account the fact that Surveyors and Appraisers may use slightly different methods and technologies to measure property area, and discrepancies can arise. By retaining the “Shortages in Area” phrase, it clarifies that the title insurance policy does not guarantee the property’s exact size, only the boundaries and encroachments.
What is the Benefit of Purchasing Survey Coverage?
The primary benefit of purchasing survey coverage is protection against unexpected boundary issues and encroachments. Here are some key advantages:
a. Legal Protection: Survey coverage offers legal and financial protection in case a dispute arises regarding the property’s boundaries or improvements. For example, if someone claims ownership of a portion of your land or that they have a right to use a portion of your land, the title insurance company will step in to defend your rights and potentially cover any financial losses.
b. Potential Cost Savings: In the event of a boundary dispute involving a matter covered in your title policy, the title insurance company may be required to cover legal expenses and potential settlements, saving you from bearing these costs yourself.
Why Should You Not Use Old Surveys When Buying a New Home?
Using old surveys when buying a new home can be risky for several reasons:
a. Changes Over Time: Property boundaries and improvements can change over time due to various factors, including renovations, construction of new structures, installation of new fences along a boundary line, or land erosion. An old survey may not accurately reflect these changes.
b. Encroachments: An old survey may not identify encroachments from neighboring properties or other issues that have developed since the survey was conducted. This could lead to boundary disputes and costly legal proceedings.
c. Title Insurance Requirements: Most title insurance companies require a current survey to provide survey deletion coverage. Using an old survey may result in the denial of coverage or additional costs to update the survey.
d. Lender Requirements: If you are obtaining a mortgage loan to purchase the property, your lender may also require a current survey to ensure the property’s boundaries, easements, and setback lines are accurately defined.
In Texas, survey deletion coverage is a crucial aspect of title insurance that can protect homeowners in certain property disputes and from financial losses related to property boundaries and improvements. Republic Title’s commitment to serving as a trusted resource for homeowners and real estate professionals is evident in its expertise and dedication to secure property transactions in Texas.
Becoming a homeowner in Texas is a significant milestone, but it also comes with financial responsibilities. One aspect that new homeowners should be aware of is property taxesbut here’s the exciting part: Texas offers a range of property tax exemptions that can save you money and make your homeownership journey even sweeter. In this post, our friends at Republic Title share how exemptions can save you significant money while guiding you through the process of applying for them. So, get ready to discover how you can maximize your savings as a homeowner in the Lone Star State!
Understanding Property Tax Exemptions
Property tax exemptions are a valuable tool designed to reduce the property tax burden for homeowners in Texas. These exemptions work by reducing the assessed value of your property, which in turn lowers the amount you owe in property taxes. It’s essential to be aware of the various exemptions available, as they can help you save money and improve your financial situation as a homeowner.
Different Types of Property Tax Exemptions in Texas
Homestead Exemption: The homestead exemption is perhaps the most well-known property tax exemption in Texas. It is available to any homeowner who uses their property as their primary residence. After a homeowner purchases a home they will generally be able to apply for a homestead exemption starting on Jan. 1 of the year after acquisition. A recent change in the law allows homeowners to apply for the homestead exemption immediately upon acquisition if their seller did not already have a homestead exemption on the property for that tax year.
Disabled Veteran Exemption: Disabled veterans in Texas are eligible for additional property tax exemptions on their homestead property based on their percentage of disability as determined by the U.S. Department of Veterans Affairs (the “VA”). The exemption can range from a partial reduction to a full exemption from property taxes. To qualify, veterans must have a service-connected disability rating of at least 10 percent from the VA.
Over 65 Years of Age Exemption: Texans who are 65 years of age or older can apply for an additional property tax exemption on their residential homestead property. This exemption can provide a cap or freeze on school district taxes and can result in significant savings on property taxes. It’s important to note that this exemption can only be granted on property that is also the property owner’s homestead.
Agricultural Exemption: If you own property that is used for agricultural purposes you may qualify for an agricultural exemption. This exemption is designed to support the state’s agricultural industry and can significantly reduce property taxes on agricultural land. To qualify, you must meet certain criteria related to agricultural use.
Disabled Individual Exemption: Disabled individuals who are not veterans may also be eligible for a property tax exemption in Texas. To qualify, the disability must be certified by a relevant authority, such as the Social Security Administration, or a licensed physician.
How to File for a Tax Exemption in Texas
Now that you’re aware of the various property tax exemptions available in Texas, let’s explore how to apply for them:
Homestead Exemption: An application must be completed and submitted to your county’s appraisal district. The application typically requires proof of residency, such as a driver’s license or voter registration card, and may have specific deadlines, so be sure to check with your local appraisal district.
Disabled Veteran Exemption: The veteran must complete the necessary application and send it to the county appraisal district, and will need to provide documentation of their service-connected disability rating from the VA.
Over 65 Years of Age Exemption: To claim the over 65 exemption on your homestead property, you must complete the application and send it to the county appraisal district to provide proof of your age, and complete any additional required paperwork. Documents that can be used to prove your age can include a birth certificate or driver’s license.
Agricultural Exemption: Property owners seeking an agricultural exemption must demonstrate that their land is used primarily for agricultural purposes. Documentation such as farm income, agricultural productivity, and evidence of ongoing agricultural activities will be required.
Disabled Individual Exemption: To apply for the disabled individual exemption, you must fill out the appropriate application form and send it to the county appraisal district and provide documentation of your disability.
It is important to note that the exemption forms can be found and downloaded or printed from most local county appraisal district websites.
Property tax exemptions in Texas can significantly reduce the financial burden of homeownership, making it an essential aspect of understanding for new homeowners. Whether you qualify for the homestead exemption, disabled veteran exemption, over 65 years of age exemption, agricultural exemption, or disabled individual exemption, taking advantage of these tax incentives can lead to substantial savings over time. To ensure you receive the tax relief you deserve, be sure to research the specific requirements for each exemption and file the necessary paperwork with your county’s appraisal district. By doing so, you can make the most of the opportunities available to you as a new homeowner in the Lone Star State. Check out Republic Title’s convenient resource with more information on tax exemptions and contact information for local appraisal districts.
The housing market remains tight despite mortgage rates falling from their elevated levels. Home sales decreased just shy of 1 percent month over month (MOM). Prices did not fall alongside sales as most of the state experienced minimal change in prices. Construction permits plummeted in November despite construction starts increasing. Homes sat on the market for less time as average days on market continued its decreasing trend observed this year.
Home Sales Fall as Listings Increase
Mortgage rates fell this month, but their elevated level remains problematic for homebuyers as Texas’ total home sales fell 0.9 percent MOM to 25,916 sales in November (Table 1). Among the Big Four, Dallas reported the only increase in home sales, rising 2.3 percent to 7,363 sales. Austin fell 4.4 percent, and San Antonio reported its second straight month of significant decreases, plummeting 8.9 percent. The gap between Dallas and Houston widened as both continued to move in opposite directions. High mortgage rates have created an affordability problem, with people needing to spend more of their total income on affording a median-priced home.
The state’s average days on market (DOM) fell to 51, continuing the decline observed in 2023. For the past seven months, readings have gone from 59 to 51 days, indicating a shorter listing period. Among the major metros, Austin (75 days) and San Antonio (70 days) reported DOM significantly above the state average, while Houston (43 days) and Dallas (46 days) experienced minor fluctuations from the previous month.
Housing supplies are stocking up as active listings marked their sixth straight month of increases, climbing to 104,058 listings. This is the first time in four years supply has hit six-digit numbers. All four major metros posted monthly gains with Dallas adding 1,949 listings (9.1 percent) while Austin added fewer than a hundred homes for the third consecutive month. The constant increases since the start of 2023 have put the state’s active listings at January 2019 levels.
The state’s new listings rose 1.85 percent to 43,255 in November. San Antonio contributed heavily to this jump, rebounding from last month’s fall with a 9.4 percent increase. Dallas’s numbers remained unchanged from October. Amid the rise in active listings, the months of inventory (MOI) had a small increase to 3.7 months with all four major metros also posting small increases.
Mortgage Rates Fall from Peak Values
As news broke that the Fed might be finished with their rate hikes, treasury and mortgage rates fell. The ten-year U.S. Treasury Bondyield fell 30 basis points to 4.5 percent. Likewise, the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate fell 18 basis points to 7.44 percent. The decreases across the board signal an increase in housing affordability.
Mixed Single-Family Construction Activity
Texas’ single-family construction permits fell 1.7 percent MOM to 12,418 issuances. Both Austin and San Antonio had MOM dips falling 7 percent and 16 percent, respectively. Houston was essentially unchanged with only a 0.3 percent decline while Dallas grew by 1.3 percent.
Construction starts grew while construction permits fell, according to data from Dodge Construction Network. Single-family starts increased 1.1 percent MOM to 11,744 units. Both Dallas (3,393 starts) and Houston (3,510 starts) continued to outperform the rest of the state, combining for 58 percent of the total starts. Austin increased its lead over San Antonio, with 1,647 starts approaching a 3:1 ratio compared to San Antonio. Historically, Austin’s advantage has been about 2:1 in total starts.
The state’s year-to-date total single-family starts value climbed to$27.7 billion, up from $25.4 billion in October. Starts values have been mirroring 2019 values since May, remaining within $1 billion dollars from the observed 2019 values. Houston and Dallas both accounted for 30 percent of the state’s construction activity values.
Median Home Price Steady Across the Big Four
Texas’ median home prices recorded a modest decline, falling 0.1 percent to $334,600 (Table 2). All of the Big Four recorded marginal changes of less than 1 percent, with Dallas exhibiting the only increase in price at 0.9 percent. Austin’s home prices have come down significantly from the highly inflated 2022 prices, although remain elevated from pre-COVID prices.
Home prices continued to hover around $200,000-$300,000 and $300,000-$400,000, accounting for 26 and 24 percent of total home sales, respectively.
The Texas Repeat Sales Home Price Index (Dec 2004=100) fell 0.9 percent MOM but remains 2 percent up from the previous year. Houston had the highest annual appreciation at 2.6 percent YOY increase while Austin showed the lowest annual appreciation at negative 3 percent.
Source – Joshua Roberson and Koby McMeans (January 24, 2024)
High mortgage rates continue to put downward pressure on the housing market, with Texas home sales decreasing 5.9 percent year-over-year (YOY). The average price fell alongside sales, with homes costing around $6,000 less than in September. Demand for new construction increased despite the high entry barrier into the housing market. Homes continue to sit on the market longer, increasing by a week since the start of the year.
Housing Demand Remains Weak
High mortgage rates continue to decrease demand for homebuyers, leading to Texas’ total home sales falling 3.7 percent to 26,164 sales in October (Table 1). The “Big Four” metros were split with Austin and Dallas experiencing gains while Houston and San Antonio fell significantly. Austin had the highest monthly elevation with a 2.4 percent growth rate while San Antonio plummeted by 6.1 percent. The gap between Dallas and Houston grew as they moved in opposite directions. High mortgage rates continue to increase the entry barrier for buyers, leaving only the most committed buyers in the market.
The state’s average days on market (DOM) enters its sixth month of decreases, falling from 59 days in February to 52 days in October, indicating a shorter listing period. Among the major metros, Houston (44 days) posted the only monthly decrease while San Antonio (70 days) posted the largest gain. Dallas (44 days) and Austin (68 days) remain unchanged from the previous month.
Housing supplies are stocking up as active listings marked their seventh straight month of increases, climbing 4.1 percent to 98,875 listings. All four major metros posted monthly gains with Houston (8.5 percent) adding 1,867 listings while Austin (0.9 percent) had a moderate gain of 84 listings. The constant increases since the start of 2023 have put the state’s active listings number at October 2019 levels.
The state’s new listings fell 1.45 percent to 42,100 in October. San Antonio contributed heavily to this decline, falling over 17 percent (790 homes). Amid the rise in active listings, the months of inventory (MOI) grew to 3.8 months with all four major metros posting marginal gains.
High Mortgage Rates Continue to Impair Affordability
The Fed’s effort to curb inflation has led to a substantial rise in both treasury and mortgage rates. The ten-year U.S. Treasury Bondyield grew for the sixth consecutive month reaching 4.8 percent. Likewise, the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate increased to 7.62 percent, up 42 basis points. The inflated mortgage rate is expected to further raise the cost of homeownership, decreasing mortgage applications.
Single-Family Permit Levels Rebound
Texas’ single-family construction permits rose 1.1 percent month over month (MOM) to 12,619 issuances. All four major metros reported growing demand for permits except for Houston (4,007 units), falling 4.6 percent. Among the other three metros, both San Antonio (967 units) and Dallas (3,731 units) saw double-digit monthly percent gains at 31 and 24 percent, respectively. Austin rebounded from last month’s fall, climbing 8.7 percent to 1,643 units.
Construction starts grew alongside construction permits according to data from Dodge Construction Network. Single-family construction starts increased 1.2 percent MOM to 11,556 units. Both Dallas and Houston led with over 3,250 houses breaking ground, surpassing the combined total of other metros outside the Big Four. Home project starts in Austin (1,605 starts) and San Antonio (694 starts) surpassed the typical 2:1 ratio.
The state’s year-to-date total single-family starts value climbed to$25.4 billion, up from $22.8 billion in September. Starts values continued the previous month’s trend of mirroring the values observed in 2019. Houston and Dallas remain the largest contributors, accounting for more than half of the state’s construction activity values. Dallas’ market share rose to 30.2 percent, with Houston trailing at 29.7 percent.
Median Home Price Falls for First Time Since February
After last month’s spike in median home prices, October erased that increase with the housing market easing as the median home price fell 1.9 percent MOM, falling by over $6,000 from last month. Housing prices remained elevated, but this month they declined as all of the Big Four metros reported monthly decreases with Austin experiencing the greatest decrease at 3 percent. Dallas and Houston declined by over 1 percent while San Antonio declined the least at 0.7 percent (Table 2).
Due to the price rise, half of homes are now priced at $200,000-$300,000 or $300,000-$400,000, accounting for 26 percent and 24 percent of total home sales, respectively.
The Texas Repeat Sales Home Price Index (Dec 2004=100) moderated at a 0.1 percent MOM loss but was up 1.5 percent from the previous year. Austin had the lowest annual appreciation with a 5.7 percent YOY decrease while Houston showed the highest annual appreciation at 2.5 percent.
Source – Joshua Roberson and Koby McMeans (December 13, 2023)
