All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month-over-month, unless stated otherwise. Data are current as of June 22, 2024.
Housing activity for both new and existing homes decreased in May. Despite a rise in active listings, home prices remained the same at $340,000 for the second month in a row.
Slow Home Sales for May
Texas witnessed a 4.2 percent decrease in total seasonally adjusted home sales month over month (MOM), resulting in 27,845 homes sold (Table 1). Austin and Dallas experienced decreases of 4.5 percent (2,731) and 2.4 percent (7,920), respectively. However, San Antonio and Houston experienced slight increases of 1.7 percent (3,049) and 1 percent (7,623). Overall, there has been a significant downward trend for sales compared with the past few years.
New listings have been steadily increasing, although there is a slight drop of 2.9 percent (45,878) in May. Among the Big Four, San Antonio experienced the only increase at 6.4 percent. Austin saw the largest decline at 13.3 percent while Dallas dropped 6.6 percent. Houston’s new listings were relatively unchanged.
The state’s average days on the market (DOM) remained unchanged at 57. Austin and San Antonio each fell by two days while Dallas has remained at 50 days for two months. San Antonio continues to have the highest days on market among the Big Four with 71 days followed by Austin at 65 and Houston and Dallas have continued to average 50.
The number of active listings went up from 111,053 to 116,404 (4.8 percent). The level of active listings increased across three of the Big four with Dallas (7.3 percent) and Austin (6.3 percent) leading the way with 26,758 and 11,604 listings, respectively.
Pending listings during May have been on a decline of 7.5 percent. All the Big Four except Houston experienced a substantial decline during this month. San Antonio pending listings fell the most dropping 10.6 percent followed by DFW and Austin dropping 8.4 and 7.8 percent, respectively. Houston was the only major city that experienced an increase in pending listings of less than 1 percent. The slowdown in sales and pending listings have contributed to the higher-than-normal active listing count.
Interest Rates Dip Slightly
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 fell six basis points to 4.48 percent. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate fell by two basis points to 7.52 percent.
Housing Highlight
Outside of Hurricane Harvey (and a data anomaly in June 2019), Houston’s single-family housing starts were relatively stable month to month during the 2010s, exhibiting a slight downturn during the 2015 oil bust followed by a steady upward trend in the latter half of the decade. Figure 1 illustrates the trend breaks and increased volatility that characterized the COVID-19 pandemic and post-pandemic eras. Historically, low interest rates and a shift in preferences toward more living space (for both health concerns and work-from-home accommodations) fueled demand for single-family housing. Homebuilders, who also leveraged lower costs of financing, responded with a surge in single-family housing starts to levels not seen since the onset of the Great Recession.
The Federal Reserve’s interest-rate hike in March 2022 marks a transition in the post-pandemic period, when housing starts descended and bottomed out at decade-level lows. In the second half of 2023, however, Houston housing starts trended near pre-pandemic levels, and activity surged to a record-high in March 2024. Despite correcting downward from the spring-time surge, the volume of starts remained above pre-pandemic levels. Figure 2 plots the intra-year progression of single-family start totals, highlighting the current trajectory in context of pre-pandemic, COVID-19 pandemic, and post-pandemic economic conditions. Houston is on a record-setting pace for single-family housing starts in 2024, but economic disruptions from Hurricane Beryl and projections of a hyper-active hurricane season present headwinds and short-run uncertainty.
Single-Family Starts and Permit Declining
Texas’ number of single-family construction permits decreased by 2 percent MOM, reaching 13,539 issuances. San Antonio had the biggest monthly increase adding 1,048 permits or 9.7 percent. Houston had a slower month for permits with a decline of 15 (4,098) percent, following a big increase in April. Dallas decreased by a negligible 0.4 percent (4,207). Austin experienced a modest increase of 1.7 percent (1,409).
Construction starts declined according to data from Dodge Construction Network. Seasonally adjusted single-family starts decreased by 3.09 percent MOM to 13,290 units. After a massive drop in April of 27 percent, there was a slight upward swing in single-family starts for Houston of 2.8 percent (4,452). Dallas dropped by 17.8 percent (3,451) while San Antonio and Austin reported modest increases of 3.2 percent (892) and 1.6 percent (1,420), respectively.
The state’s total value of single-family starts climbed from $11.8 billion in May 2023 to $16.65 billion in May 2024. Houston accounted for 36.4 percent of the state’s total starts value followed by Dallas with 26.4 percent.
Home Prices Unchanged
Texas’ median home price has remained stable at approximately $340,000 for four months (Table 2). The prices have remained stable this month with San Antonio and Houston increasing by 0.4 percent and 0.2 percent, respectively. Austin and Dallas both have declined by 0.4 percent. Despite there being an increase in new listings and active listings, housing prices have remained resilient. The Texas Repeat Sales Home Price Index (Jan 2005=100) grew 0.4 percent MOM and 2.2 percent year over year (YOY). Austin’s annual appreciation remains below the state’s average, falling by 1.5 percent YOY.
Source: Texas Housing Insight | Texas Real Estate Research Center (tamu.edu)