Seasonally adjusted housing sales fell in March following February’s growth. Despite the drop, three months into the year cumulative sales are at the same level as last year. Home prices on the other hand remained the same at $340,000 for the second month in a row.
Texas Housing Insight is a summary of important economic indicators that help discern trends in the Texas housing markets. All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month-over-month, unless stated otherwise.Data current as of March 22, 2024.
Seasonally adjusted housing sales fell in March following February’s growth. Despite the drop, three months into the year cumulative sales are at the same level as last year. Home prices, on the other hand, remained the same at $340,000 for the second month in a row.
Home Sales Retreat from February’s Gains
Texas witnessed a 7.1 percent decrease in total seasonally adjusted home sales month over month (MOM), resulting in 27,595 homes sold (Table 1). Although most major cities experienced an upward trend in February, there was a slight downturn across the board in March. Notably, San Antonio saw the most significant decline at 9.2 percent, representing a decrease of over 296 sales compared to February. Conversely, Dallas-Fort Worth had the smallest decline, with only 259 fewer sales (a 3.2 percent decrease).
After a consistent increase in new listings from December to February, Texas experienced a slight dip, declining from 45,696 to 45,448 listings (0.5 percent). Among the major cities, only San Antonio defied the trend, maintaining stable new listings. However, both Dallas and Houston saw significant drops. Dallas witnessed a reduction of 2,399 listings (17.2 percent), while Houston experienced a decrease of 1,394 listings (9.8 percent).
The state’s average days on the market (DOM) decreased by one day from 57 to 56. Austin fell by almost ten days while Dallas fell by a mere two days. There weren’t any notable changes in Houston and San Antonio. Statewide inventory increased from 3.9 to 4.1 months.
The number of active listings went up from 101,933 to 106,269 (4.2 percent) despite the slight decline in new listings. One explanation for the increase could be the sudden decrease in pending listings, which fell 6.2 percent. The Big Four experienced an upward trend in active listings with an addition of 334 for Austin (3.6 percent). Both Dallas and Houston experienced a similar increased trend in active listings by 2.2 percent with an addition of 524 and 570, respectively. San Antonio experienced a modest increase of 226 (1.8 percent).
Interest Rates on the Rise
Treasury and mortgage rates remain below their peak 2023 levels but have been increasing since the start of the year. The average ten-year U.S. Treasury Bondyield stayed at 4.21 for the second consecutive month. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate rose by 4 basis points to 6.82 percent.
Single-Family Starts Stabilizing in March
Texas’ number of single-family construction permits increased by 2.6 percent MOM, reaching 14,013 issuances. In Houston, there was a significant decline of 24.1 percent compared to the previous month. In contrast, Austin and San Antonio saw more modest increases, with 2.1 percent and 5.5 percent, respectively. Dallas permits decreased by 5.2 percent.
Construction starts rose alongside permits, according to data from Dodge Construction Network. Single-family starts rose by 2.6 percent MOM to 16,104 units. Houston had been experiencing an almost vertical increase from 56.8 in February, which is slowly reducing. It currently stands at 9.6 percent in March. San Antonio had a modest increase of 2.9 percent, and Austin rose by 15.8 percent. Dallas had surprisingly no change after the previous month’s 42 percent increase.
The state’s total value of single-family starts climbed from $6.55 billion in March 2023 to $9.51 billion in March 2024. Houston accounted for 36.6 percent of the state’s total starts value. Starts value activity is up from last year as Austin and San Antonio also posted moderate increases.
Home Prices Decline
Texas’ median home price remained stable at approximately $340,000 compared to the previous month (Table 2). However, across most major metropolitan areas, home prices saw a decline. Notably, San Antonio experienced an increase of 4.2 percent, while Austin had the highest decline among the four major cities at 5.2 percent. Dallas saw a minor decrease of 0.3 percent, while Houston declined by 1.7 percent.
The Texas Repeat Sales Home Price Index (Jan 2005=100) grew 0.6 percent MOM and 2.8 percent year over year (YOY). Austin’s annual appreciation remains below the state’s average, falling by 0.7 percent YOY.
Source: Texas Housing Insight | Texas Real Estate Research Center (tamu.edu)