Texas Housing Insight – May 2020

by Real Estate ArticlesResourcesStats

Here is the May 2020 Summary from Texas A&M Real Estate Center.





Total Texas housing sales continued to fall in May, but the decline slowed to a 2.1 percent monthly decrease. Nonetheless, the inventory of homes for sale fell to a record low of 3.2 months, possibly due to owners pulling their homes off the market or failing to list them in the first place during the COVID-19 pandemic. Increased caution during the buying process resulted in softer demand, pushing the average days on market up to 61 days. The Repeat Sales Home Price Index, however, suggested stable price gains.

The coronavirus outbreak is the greatest threat to the Texas housing market since the 1986-90 recession via disruptions to buyer and seller confidence, the negative income shock, and wariness of visiting or showing homes for sale. Mortgage applications for home purchases and the Real Estate Center’s single-family housing sales projection, however, implied that home sales were beginning to recover before the second wave of new coronavirus cases.

Supply*

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction levels, inched up in May as the industry began rehiring some of the jobs shed during the economic shutdown. The Residential Construction Leading Index, however, continued to trend downward as falling housing starts offset increased permitting activity and decreased real interest rates, suggesting sluggish activity in the near future. The metropolitan leading indexes also extended downward trajectories.

Private bank loan data revealed construction activity accelerated 3.4 percent quarter over quarter (QOQ) during the first three months of 2020. After a sluggish second half of 2019, single-family investment increased 2.9 percent QOQ. Meanwhile, multifamily loan values rose for the fifth straight quarter, jumping 3.8 percent QOQ to a record-breaking $8.9 billion. Second-quarter financing, however, may stall as lending standards tightened at the onset of the pandemic.

As the statewide stay-at-home mandate expired and economic uncertainty temporarily calmed, single-family construction permits recovered 12.6 percent in May. Although levels remained nearly a fifth below that of peak issuance during February, Texas remained the national leader, contributing 17 percent of the national total. Houston topped the list with 3,035 nonseasonally adjusted permits, followed by Dallas-Fort Worth (DFW) with 2,799. Rockwall County accounted for much of the Dallas metropolitan division’s 14.1 percent improvement, the greatest increase in the Texas Urban Triangle, after adjusting for seasonality. San Antonio registered an upturn in activity, posting 787 nonseasonally adjusted permits. Issuance remained sluggish in Austin, however, with only 1,412 permits. In Texas’ multifamily sector, permits fell 18 percent, but the trend maintained a strong upward trajectory.

Total Texas housing starts fell 30.1 percent to a six-year low with particular weakness in the multifamily sector. Single-family private construction values increased 5.8 percent after adjusting for inflation with Houston posting the largest improvement, rising 20.2 percent, followed by San Antonio with a 10.0 percent climb. Values jumped 3.9 percent in Austin but extended a two-month fall in DFW, declining 3.7 percent.

Despite decreased sales, Texas’ months of inventory (MOI) fell to a historic 3.2 months as the state’s supply of active listings plummeted to its lowest level in three-and-a-half years. A total MOI around six months is considered a balanced housing market. Inventory for homes priced less than $300,000 slid to an all-time low of 2.4 months as the price range registered increased sales. On the other hand, the supply of active luxury home (homes priced more than $500,000) listings expanded for the first time this year while closed listings fell, pushing the MOI up to 7.6 months. This disparity exemplifies the shortage of affordable housing during a time when the rocky economic atmosphere may make lower-priced homes look more financially feasible to the potential homebuyer.

Inventory in the major metros decreased across the board in every price cohort except for homes priced more than $500,000. The supply of active listings fell the most in Central Texas, which, combined with falling sales, resulted in more substantial changes. Austin’s MOI slid to 1.9 months after two straight monthly increases, while the San Antonio metric recorded a historic low of just three months. In Dallas and Fort Worth, inventory inched down to 2.6 and 2.4 months, respectively. The Houston MOI was the only one above the statewide average at 3.4 months.

Demand

Public health precautions and social distancing measures during the previous couple of months continued to weigh on total housing sales, which decreased 2.1 percent in May. Sales for homes priced less than $300,000 increased marginally but remain one-fifth below peak levels this year. Still, Texas registered a smaller decline than the U.S. as a whole, as nationwide sales sank 6.6 percent.

North Texas sales fell 4.7 and 1.9 percent in Dallas and Fort Worth, respectively. Sales declined 7.7 percent in Austin and 3.0 percent in San Antonio. Houston was the exception with sales rising 1.9 percent. YTD levels are still behind last year’s pace during the first five months, much less record-breaking activity during February.

Reduced showing and visiting of homes during March and April translated to slightly softer housing demand, pushing Texas’ average days on market (DOM) up to 61 days and ending a year-long downward trend. The Houston and San Antonio DOMs hovered just above the statewide average, ticking up to 62 and 63 days, respectively. In Austin, the average home sold after 55 days, six days slower than the previous month. The metric in North Texas increased by five days to 57 and 50 days in Dallas and Fort Worth, respectively. Demand for existing homes softened more than for new homes in every location except Fort Worth, possibly reflecting more willingness to visit and purchase new construction.

The ongoing spread of the coronavirus kept interest rates at historically low levels, but an upturn in oil prices slowed the downward slide. The ten-year U.S. Treasury bond yield flattened at 0.7 percent, but the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate dropped to its lowest reading on record at 3.2 percent. Mortgage applications for home purchases rose by a third in May after three straight decreases yet remained 4.5 percent below year-end levels. Refinance activity stumbled on the month, although applications were up 60.8 percent YTD.

Prices

The Texas median home price contracted 2.3 percent in May, falling to a near-annual low of $240,500. In year-over-year (YOY) terms, the median sale price appreciated just 1.6 percent, the smallest annual change since 2012. A shift in sales composition may explain the monthly decline, but the distribution was similar relative to the same period last year. Another explanation for the subdued price appreciation is that the state’s sale-to-list price ratio fell for the second consecutive month, with the recent decrease the steepest in nine years. The shift in leverage toward buyers coincided with softer demand.

At the metropolitan level, median home prices declined on a monthly basis in all but Austin, where the metric flattened to $317,700 following a 4.6 percent decrease the prior month. Annual growth was sluggish except in San Antonio, where the median price rose 3.5 percent YOY to $235,400, but the increase remained below the long-term average pace. The metric in both Fort Worth and Houston was $240,800, while Dallas’ median price fell to $287,300.

The Texas Repeat Sales Home Price Index, a better measure of changes in single-family home values, provides insight into how Texas home prices evolve. Although the index did decelerate on a monthly and annual basis, a YOY increase of 3.4 percent suggests the pandemic’s effect on home values has been minimal. Houston’s and San Antonio’s indexes grew less than the statewide measure, rising 2.5 and 3.1 percent YOY, respectively. Austin’s metric jumped 4.9 percent but recorded its slowest rate in seven months. Only in North Texas did the index accelerate, climbing 2.9 percent in Dallas and 4.0 percent in Fort Worth.

Single-Family Forecast

The Real Estate Center projected single-family housing sales using monthly pending listings from the preceding period (Table 1). Only one month in advance was projected due to the uncertainty surrounding the COVID-19 pandemic and the availability of reliable and timely data. Sales are expected to increase in June for the first time since February, when activity peaked. Texas’ single-family sales are estimated to rebound 33.7 percent, with Austin leading the major metros, climbing 39.1 percent. Dallas and Houston single-family sales are expected to jump 36 and 35 percent, respectively, while San Antonio’s sales increase 30 percent. Nevertheless, the data indicate a full recovery will not be reached in June. Even then, a third-quarter comeback may be threatened if the second wave of COVID-19 cases triggers another economic shutdown.

 

* All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.

Source – James P. Gaines, Luis B. Torres, Wesley Miller, Paige Silva, and Griffin Carter (July 14, 2020)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

May 2020 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStats

The May 2020 DFW area real estate statistics are in and we’ve got the numbers! Take a look at our stats infographics, separated by county, with MLS area stats on each county report as well! These infographics and video are perfect for social sharing so feel free to post them!

To see past month’s reports, please visit our resources section here.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

Texas Housing Insight – April 2020

by Real Estate ArticlesResourcesStats

Here is the April 2020 Summary from Texas A&M Real Estate Center.

Texas Housing

Total Texas housing sales declined 17.6 percent in April amid economic uncertainty surrounding the COVID-19 pandemic. Showings of homes for sale were not explicitly prohibited by the month-long statewide stay-at-home order, but potential buyers and sellers were certainly more reluctant to host and attend in-person tours and open houses. Nevertheless, demand remained stable as the average days on market slid to 57 days, although loan applications for home purchases decreased while lenders implemented stricter lending standards.

On the supply side, both housings starts and building permits plunged more than 20 percent despite construction being considered an “essential” business under the statewide mandate. Median home-price appreciation decelerated but remained positive as corroborated by the Texas Repeat Sales Home Price Index. The coronavirus outbreak is the greatest threat to the Texas housing market since the 1986-90 recession via disruptions to buyer and seller confidence, the negative income shock, and wariness of visiting and showing homes for sale. The Real Estate Center, however, projects the rate of decline in single-family housing sales will slow in May relative to April.

Supply*

Contemporaneous and anticipated construction activity continued to fall during the coronavirus-induced downturn. The Texas Residential Construction Cycle (Coincident) Index, which measures current construction levels, sank to its lowest reading since 2017 as industry employment plummeted. Decreased building permits and housing starts offset falling interest rates, pulling the Residential Construction Leading Index down to levels around those last seen in January 2007.

As economic uncertainty ramped up due to coronavirus concerns, single-family construction permits nosedived 22.2 percent. Nevertheless, Texas remained the national leader with Houston and Dallas issuing 2,829 and 1,856 nonseasonally adjusted permits, respectively, despite declining about 25 percent. Other locales registered more moderate decreases between 11 and 17 percent, but San Antonio permits fell for the sixth consecutive month to 632. Austin issued 1,618 permits, double the per capita statewide rate, while Fort Worth posted 1,002. On the other hand, Texas’ multifamily permits improved for the second straight month, increasing 16.1 percent.

Total Texas housing starts fell more than 20 percent to a year-and-a-half low as building activity slowed under social distancing rules. Meanwhile, single-family private construction values dropped 26.9 percent in April to a seven-year low after adjusting for inflation. Every major metro registered a steep decline, with San Antonio values contracting by a third. Houston’s metric sank 22 percent after flattening the previous month, while Austin and DFW values decreased for the second straight month. Single-family construction, however, is expected to rebound in the coming months as housing demand remains relatively stable.

The state’s supply of active listings fell to its lowest level year to date (YTD), offsetting plummeting sales and pulling Texas’ months of inventory (MOI) down to 3.4 months. A total MOI around six months is considered a balanced housing market. Inventory for homes priced less than $300,000 (where four-fifths of total sales take place) slid to 2.7 months. On the other hand, luxury home inventory (consisting of homes priced more than $500,000) ticked up for the first time in eight months as falling sales outweighed a decline in the supply of active listings. So, despite falling sales, the overall market remained relatively tight and in short supply.

On the metropolitan level, the Houston MOI registered the greatest drop but remained above the statewide level at 3.6 months. North Texas inventory flattened at 2.7 and 2.5 months in Dallas and Fort Worth, respectively. San Antonio’s MOI increased slightly to 3.3 months, while Austin’s metric reached 2.1 months. Most of the expansion happened in the higher price ranges. 

Demand

With COVID-19 impacts well underway, total housing sales dropped 17.6 percent in April to their lowest level since 2015, decreasing in every price cohort. Homes priced less than $300,000, however, accounted for two-thirds of the decline, corresponding to the sales composition. Texas sales decelerated from a double-digit pace in the first two months of the year relative to the same period in 2019 to just a 1.5 percent clip when comparing the first four months of the year.

Sales activity in the Metropolitan Statistical Areas (MSAs) declined at a faster rate than the previous month, with Austin and Houston sales volumes falling by a fifth. Sales plunged 18.7 percent in DFW, largely due to decreases in the $200,000-$300,000 price cohort. San Antonio was the only major metro to not register reductions across the price spectrum as homes priced from $400,000-$500,000 reached an all-time high. However, the MSA’s total sales still slid 14.3 percent.

Despite massive layoffs across the state, housing demand remained healthy as Texas’ average days on market (DOM) extended a year-long downward trend, sinking to 57 days. Some of this resiliency may reflect disproportionate job losses occurring at the lower-end of the earnings spectrum which primarily consists of renter households. Austin’s metric slipped to its lowest level in five years at 47 days, while the San Antonio DOM inched down to 59 days. The average home in Houston sold after 59 days, stabilizing around its year-ago level. Demand softened slightly in North Texas as the DOM ticked up to 52 and 44 days in Dallas and Fort Worth, respectively but remained strong compared with the statewide average.

Ongoing concerns, such as the global coronavirus pandemic and critically low oil prices, pulled interest rates down in April. Both the ten-year U.S. Treasury bond yield and the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate dropped to their lowest readings on record at 0.7 and 3.3 percent, respectively. Despite the former reaching a series low, mortgage applications for home purchases decreased for the third straight month plummeting 28.5 percent YTD amid coronavirus-related disruptions to the housing market and stricter lending standards. Applications to refinance home loans fell 13.2 percent in April but maintained positive YTD growth after doubling since year end in the first quarter. However, Center staff expects applications volumes to recover in the coming months assuming housing demand remains stable.

Prices

The Texas median home price flattened at $247,400, posting its lowest annual growth rate this year at 4.2 percent. Austin’s median home price sank to $316,400 after double-digit YOY hikes the previous two months when the proportion of homes priced more than $300,000 exceeded 60 percent for the first time ever. Home-price appreciation in Dallas and Houston also decelerated to around 3 percent, with the metric hovering around $296,700 and $248,800, respectively. On the other hand, YOY growth in Fort Worth and San Antonio accelerated, pushing the median price up to $252,900 in the former and $240,600 in the latter.

The Texas Repeat Sales Home Price Index, a better measure of changes in single-family home values, provides insight into how Texas home prices evolve. The index indicated home price appreciation decelerated in April on both the state and metropolitan levels. Texas’ index rose just 3.6 percent YOY, with the larger locales sliding well under the statewide average. The Dallas and Houston metrics increased only 2.3 and 2.6 percent, respectively. Austin’s index maintained the highest annual growth rate of 6 percent. The Fort Worth and San Antonio indices slowed to 3.8 and 3.2 percent YOY growth, respectively, contrasting median home price data. Favorable housing affordability relative to other parts of the country supported the Lone Star State’s economic growth after the housing bubble burst a decade ago. Texas needs to maintain affordability for the housing market to remain a stalwart in the current recession and subsequent recovery.  

The Real Estate Center projected single-family housing sales using monthly pending listings from the preceding period (see Table 1). Only one month in advance was projected due to the uncertainty surrounding the COVID-19 pandemic and the availability of reliable and timely data. Although activity is expected to worsen, the rate of decline decelerated at the statewide level, from a 13.6 percent decrease in April to an anticipated 10.1 percent decrease in May. The drop in single-family sales in DFW and Houston is also expected to slow with the metric falling 10.4 and 7.4 percent, respectively. Central Texas, on the other hand, contradicted the overall state trend as the sales are estimated to plummet at a faster rate in May, 17.6 and 11.0 percent in Austin and San Antonio, respectively, relative to the previous month.

* All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.

Source – James P. Gaines, Luis B. Torres, Wesley Miller, Paige Silva, and Griffin Carter (June 11, 2020)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

April 2020 DFW Area Real Estate Stats

by ResourcesStatsVideo

The April 2020 DFW area real estate statistics are in and we’ve got the numbers! Take a look at our stats infographics, separated by county, with MLS area stats on each county report as well! These infographics and video are perfect for social sharing so feel free to post them!

To see past month’s reports, please visit our resources section here.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

Texas Housing Insight – March 2020 Summary

by Real Estate ArticlesResourcesStats

Here is the March 2020 Summary from Texas A&M Real Estate Center.

 



Please note this review does not account for the impacts of the COVID-19 outbreak but reflects the market through March 2020.


With half the month affected by the domestic coronavirus outbreak, total Texas housing sales decreased 4 percent in March, but still resulted in moderate first quarter growth. This decline does not bode well for second quarter home sales, when shelter-in-place and stay-at-home orders were implemented, increasing the reluctance of potential buyers and sellers to visit and show homes for sale. Supply-side activity decelerated amid uncertain economic conditions, but average days on market indicated steady demand. Median home-price appreciation remained stable, corroborated by the Texas Repeat Sales Home Price Index. The coronavirus outbreak is the greatest threat to the Texas housing market since the 1986-90 recession via disruptions to buyer and seller confidence, the negative income shock, and wariness of visiting and showing homes for sale. Preliminary effects showed in the March data with more significant impacts almost certain to appear during the second quarter of the year.

Supply*

Contemporaneous and anticipated construction levels took a step back in March after reaching post-recessionary highs the prior month, signaling a coronavirus-induced downturn. The Texas Residential Construction Cycle (Coincident) Index, which measures current construction levels, declined due to industry wage and employment cuts. Decreased building permits and housing starts offset falling interest rates, pulling the Residential Construction Leading Index down.

According to Metrostudy, activity at the earliest stage of the construction cycle cooled as the number of new vacant developed lots (VDLs) in the Texas Urban Triangle declined 5.4 percent quarter over quarter (QOQ) after reaching a post-recessionary high in 3Q2019. Dallas-Fort Worth (DFW) and San Antonio VDLs fell for the second straight quarter, most notably in the $300,000-$400,000 price range. On the other hand, Austin’s VDLs exceeded its average in 2019 while Houston lot development surged to a record-breaking 10,700 amid accelerated activity in the lowest-priced cohort (homes priced less than $200,000).

Quarterly fluctuations in the major metros’ single-family construction permits reflected movements in VDLs. On a month-over-month basis, issuance slowed across the board, although Texas continued to lead the nation in nonseasonally adjusted permits on both the state and metropolitan levels. Houston and DFW topped the list, issuing 4,116 and 3,506 monthly permits, respectively. Austin ranked fifth after Phoenix and Atlanta with 1,869 permits, while San Antonio permits numbered 966. Meanwhile, Texas’ multifamily permits fell about 5 percent QOQ despite monthly improvements in March.

Total Texas housing starts normalized after skyrocketing the previous month, decelerating to 4.6 percent QOQ growth. In the single-family sector, Metrostudy data confirmed strong supply-side activity in Houston with a post-crisis record 9,000 homes breaking ground in the first quarter. Dallas and San Antonio single-family starts flattened to start the year after reaching post-recessionary highs the previous quarter. In Austin, starts showed signs of normalizing after rapid growth during 2019.

Following solid improvement to start the year, single-family private construction values dropped nearly 6 percent in March to end the quarter with modest growth. San Antonio continued to correct downward after a rapid climb during the second half of 2019. Austin construction values decelerated in 1Q2020, while Houston’s showed signs of flattening. Values in North Texas, however, accelerated 6.4 percent QOQ.

Decreased sales slowed the decline in Texas’ months of inventory (MOI), which settled at 3.2 months. A total MOI around six months is considered a balanced housing market. Inventory for homes priced less than $300,000 (where four-fifths of total sales take place) held at 2.5 months as a sizeable reduction in sales offset a downtick in the supply of active listings. In the luxury home market (comprised of homes priced more than $500,000), the MOI fell below 7 months but remained elevated compared to the lower-priced cohorts.

Movements in inventory levels differed among the major metros. The San Antonio MOI dipped to an all-time low of 2.9 months, while North Texas inventory slid below 2.5 months in Dallas and 2.3 months in Fort Worth. On the other hand, Austin’s metric ticked up above 1.7 months as fluctuations in the metro’s inventory for homes priced under $300,000 mirrored the state’s change. Houston registered broader increases for an overall MOI of 3.7 months with only luxury home inventory shrinking (but still exceeding eight months).

Demand

As COVID-19 concerns affected the showing and visiting of homes for sale, particularly during the last half of the month, total housing sales fell 4 percent in March with decreases in every price cohort. The monthly decline, however, was more palatable than the 10.2 percent national plummet. Moreover, Texas sales increased 2.2 percent QOQ, exceeding the countrywide growth rate of 1.4 percent.

Monthly resale transactions contracted in each of the major metros for a statewide drop of 3.3 percent, but changes in quarterly sales volumes differed. Dallas and San Antonio existing-home sales rose 4.9 and 3.5 percent QOQ, respectively, with the latter maintaining positive momentum. Houston also exhibited an upward trend albeit at a more moderate rate, increasing 1 percent QOQ. In Austin and Fort Worth, quarterly resale volumes fell flat.

In the new-home market, homes priced more than $300,000 accounted for the 2.1 percent QOQ increase in the Texas Urban Triangle. North Texas and Houston new-home sales surged 7.8 and 5.2 percent, respectively, with the latter recording improvement five quarters in a row. Momentum in Central Texas faltered as sales declined 1.5 and 7.2 percent in Austin and San Antonio, respectively, from post-crisis records at year end.

Ahead of the most serious coronavirus impacts, Texas’ homeownership rate rose to its greatest level since 2012 at 64.4 percent in 1Q2020, just one percentage point less than the U.S. rate. On the metropolitan level, all four major metros registered an increase in homeownership. Houston reached a post-recessionary high of 65.5 percent, while the San Antonio metric also exceeded the statewide average with 66.1 percent homeownership. In Dallas and Austin, homeownership was slightly lower at 62.6 and 58.9 percent, respectively. Homeownership rates could suffer as COVID-19 foreclosure-protection policies expire later this year.

Texas’ average days on market (DOM) flattened at 59 days, indicating still-healthy demand. Houston’s and Fort Worth’s DOMs steadied at their yearlong averages of 58 and 44 days, respectively. The San Antonio metric ticked up slightly to 62 days, but the average home sold after only 50 days in Austin and 51 days in Dallas. The downward trends confirmed robust demand despite falling sales.

The domestic coronavirus outbreak and falling oil prices pulled interest rates down in March. The ten-year U.S. Treasury bond yield dropped to 0.9 percent, while the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate remained less than 3.5 percent. While applications to refinance home loans doubled in the first quarter, mortgage applications for home purchases fell 11.3 percent in March amid reduced showing and visiting of houses and an uncertain economic climate. Decreased home purchase mortgage applications may indicate a slowdown in sales in the coming months.

Prices

The Texas median home price rose to $249,000, a 5.8 percent YOY increase. Austin pushed the statewide metric upward, posting double-digit home-price appreciation for the second straight month as the median home price reached $337,200. In San Antonio, the median price accelerated 6.6 percent YOY to $241,000. However, home-price appreciation moderated in North Texas and Houston where the median prices remained below record highs. The Dallas metric hovered at $298,100 as Fort Worth’s and Houston’s declined to $249,000 and $249,400, respectively.

The Texas Repeat Sales Home Price Index, a better measure of changes in single-family home values, provides insight into how Texas home prices evolve. The index indicated more moderate annual home price appreciation of 3.8 percent, but the rate of change steadied, similar to the median home price. The same phenomenon was observed on the metropolitan level (growth rates for each metro’s median home price exceeded its respective index, but the pace trended in the same direction). Austin’s index maintained a rapid clip, rising 5.9 percent YOY. The Dallas and Houston indices also picked up, increasing 2.5 and 3.0 percent, respectively. Growth in Fort Worth’s and San Antonio’s indexes slowed but remained slightly elevated at 3.6 and 3.4 percent, respectively. Favorable housing affordability relative to other parts of the country supported the Lone Star State’s economic growth in the years following the burst of the housing bubble a decade ago. Texas needs to maintain affordability for the housing market to remain a stalwart in the impending recession and subsequent recovery.  

The data reported here reflect only preliminary COVID-19 impacts on the Texas housing market, although the Saudi-Russian oil price war greatly affected the energy commodities and related employment in March. The anticipated events of the next few months and the revised economic expectations for the second half of the year will overshadow recent optimistic conditions. The government stimulus bill signed late in March allowing forbearances on federally backed mortgage loans, moratoriums on evictions, and direct financial payments to Americans earning within an income threshold will aid current homeowners, but is unlikely to spur additional, immediate-home sales.

The Real Estate Center forecasted single-family housing sales using monthly pending listings from the preceding period (see table). The Center projected only one month in advance due to the uncertainty surrounding the COVID-19 pandemic and the availability of reliable and timely data. In April, statewide sales are expected to fall by more than three times as much as during March, plummeting 14.4 percent. Austin and North Texas activity may act similarly. Houston and San Antonio single-family sales, however, are predicted to nosedive around 17.4 and 12.2 percent next month after relatively moderate decreases of 3.0 and 3.5 percent, respectively, in March.

________________

* All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.

Source – James P. Gaines, Luis B. Torres, Wesley Miller, Paige Silva, and Griffin Carter (May 11, 2020)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

 

March 2020 DFW Area Real Estate Stats

by ResourcesStatsVideo

The March 2020 DFW area real estate statistics are in and we’ve got the numbers! Take a look at our stats infographics, separated by county, with MLS area stats on each county report as well! These infographics and video are perfect for social sharing so feel free to post them!

To see past month’s reports, please visit our resources section here.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

Texas Housing Insight – February 2020 Summary

by Real Estate ArticlesResourcesStats

Here is the February 2020 Summary from Texas A&M Real Estate Center.



Please note this review does not account for the impacts of the COVID-19 outbreak but reflects the market through February 2020.

Prior to the domestic coronavirus outbreak, Texas housing sales increased 2.3 percent in February during healthy economic conditions and low interest rates. Housing demand was robust, although inventories were constrained, especially for homes priced less than $300,000. Strong supply-side activity, however, was poised to alleviate some shortages. Home-price appreciation accelerated, but the Repeat Sales Index suggested more moderate price growth. The coronavirus outbreak is the greatest threat to the Texas housing market via disruptions to building material supply-chains, the negative income shock, and wariness of visiting and showing homes for sale. These effects may show up in the March data but will likely have a significant impact during the second quarter of the year.

Supply*

Contemporaneous and anticipated construction levels reached post-recessionary highs in February. The Texas Residential Construction Cycle (Coincident) Index, which measures current construction levels, ticked up amid industry wage and employment improvements. Falling interest rates and increased building permits and housing starts supported growth in the Residential Construction Leading Index.

Single-family construction permits extended a yearlong upward trend, rising 1 percent. Texas led the nation with 11,211 nonseasonally adjusted permits, accounting for more than 17 percent of the U.S. total, but ranked sixth in per capita issuance. At the metropolitan level, Houston topped the list with 3,515 permits but actually declined 1.8 percent after adjusting for seasonality. Austin and Dallas comprised most of the state’s increase, issuing 1,631 and 2,486 nonseasonally adjusted permits, respectively. San Antonio permits fell to 773, but the metric remained elevated in Fort Worth at 954. In the multifamily sector, permits decreased 5.6 percent after a modest start to the year.

Texas housing starts surged 21.5 percent to its greatest post-crisis level with improvements in both the single-family and multifamily sectors. On the other hand, single-family private construction values dropped 4.7 percent after adjusting for inflation. As with permits, Houston was responsible for most of the contraction. Austin and DFW values flattened, while San Antonio only partially recovered from a 13 percent plunge in January.

Record sales and a dwindling supply of active listings pulled Texas’ months of inventory (MOI) down to an all-time low of 3.2 months. A total MOI around six months is considered a balanced housing market. The MOI for homes priced less than $300,000 fell to 2.5 months, while inventory for luxury homes (those priced more than $500,000) also declined but remained elevated at 7.5 months. This disparity exemplifies the shortage of affordable housing, although efforts have been made to more closely match demand and supply.

Inventory in the major metros decreased across the board. Austin maintained the most constrained inventory with an MOI of 1.7 months, followed by Fort Worth at 2.3 months. The Dallas and San Antonio metrics slid to 2.7 and 3.0 months, respectively. After a brief expansion to start the year, Houston’s inventory fell below 3.7 months as the metro’s supply of active listings contracted for the first time in six months, largely due to reductions in the lower price ranges.

Demand

After stalling the previous month, total housing sales during February rose 2.3 percent in an environment of low interest rates and solid employment growth. Sales for homes priced more than $400,000 accounted for much of the gain, whereas activity for homes priced less than $400,000 decelerated.

In nearly all of the major metros, sales for homes in the luxury price bracket were the greatest contributor to overall closings. Central Texas sales increased 2.2 and 2.1 percent in Austin and San Antonio, respectively, while Dallas sales rose 3 percent. Although sales for higher-priced homes in Fort Worth climbed 10.3 percent, total sales flattened as activity in other price ranges took a step back. Houston was the exception. Homes priced between $200,000-$400,000 comprised two-thirds of the city’s overall 4.8 percent improvement.

Texas’ average days on market (DOM) ticked down to 58 days, indicating healthy demand. The metric stabilized at 56 days in Houston and at 53 and 43 days in Dallas and Fort Worth, respectively. Demand was especially robust in Austin, where the DOM declined to 49 days after shedding more than a week off its year-ago level. San Antonio’s DOM ticked up slightly to 62 days but hovered around its seven-year average.

Growing concerns over the coronavirus outbreak and falling oil prices pulled interest rates down in February. The ten-year U.S. Treasury bond yield decreased to 1.5 percent, while the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate fell below 3.5 percent. Mortgage applications for home purchases slowed but maintained 2.7 percent year-to-date (YTD) growth. Refinance activity remained sluggish from month to month, although the number of applications received was astronomical relative to the same period last year.

Prices

The Texas median home price accelerated 6.3 percent YOY to $249,100 as demand strengthened and inventory shrank. Austin’s median price reached double-digit YOY growth for the first time since 2015, skyrocketing nearly 13 percent to $335,600. The metric in San Antonio ($242,000) and Houston ($252,100) rose 6.8 and 6.4 percent, respectively. On the other hand, home-price appreciation softened to around 5 percent growth in North Texas, resulting in a median price of $297,500 in Dallas and $249,100 in Fort Worth.

The Texas Repeat Sales Home Price Index, a better measure of changes in single-family home values, provides insight into how Texas home prices evolve. The index indicated more moderate annual home price appreciation of 3.2 percent. Except for in San Antonio, where the metric picked up its pace to rise 3.4 percent YOY, the metropolitan indices’ growth rates slowed from the month prior. The Austin index registered just 4.6 percent growth compared with the metro’s much greater home-price appreciation. Houston’s index increased 2.8 percent, while the Dallas and Fort Worth indices rose 2.5 and 2.9 percent, respectively. Favorable housing affordability relative to other parts of the country supported the Lone Star State’s economic growth in the years following the burst of the housing bubble a decade ago. Texas needs to maintain affordability for the housing market to remain a stalwart in the impending recession and subsequent recovery.  

The data reported here indicate the strength of the Texas housing market prior to the domestic COVID-19 outbreak and plunge in oil prices. The events of the past month and the economic expectations for the second half of the year will overshadow recent optimistic conditions. The government stimulus bill signed late in March allowing forbearances on federally backed mortgage loans, moratoriums on evictions, and direct financial payments to Americans earning within an income threshold will aid current homeowners, but it is unlikely to spur additional home sales.  Even though we expect the real estate sector will be less affected than many other industries, the Center’s 2020 housing projections will in all probability be reached. The total impact of the impending recession on Texas’ housing market is yet to be seen.

Source – James P. Gaines, Luis B. Torres, Wesley Miller, Paige Silva, and Griffin Carter (Apr 10, 2020)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

February 2020 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStatsVideo

The February 2020 DFW area real estate statistics are in and we’ve got the numbers! Take a look at our stats infographics, separated by county, with MLS area stats on each county report as well! These infographics and video are perfect for social sharing so feel free to post them!

To see past month’s reports, please visit our resources section here.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

Texas Housing Insight – January 2020 Summary

by Real Estate ArticlesResourcesStats

Here is the January 2020 Summary from Texas A&M Real Estate Center.

January 2020 Summary

Please note this review does not account for the impacts of the COVID-19 outbreak but reflects the market through January 2020.

Texas housing sales stabilized in January after reaching a record high the previous month. Steady employment growth and falling mortgage interest rates continued to support housing demand, as exemplified by increased mortgage applications and a downtick in the average days on market. Inventories were constrained, especially for homes priced less than $300,000, but renewed permit issuance indicates positive construction activity in 2020. Although home-price appreciation has moderated over the past few years, tight supply levels put additional affordability pressure on top of lackluster average wage growth. Due to the coronavirus outbreak, there may be disruptions to building material supply chains and the visiting and showing of homes for sale, threatening the Texas housing market. These effects will probably be reflected in the second quarter of the year.

Supply*

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction activity, balanced after trending upward for four straight months as construction employment growth slowed. The Residential Construction Leading Index dipped slightly as housing starts decreased but hovered around the post-crisis high, suggesting solid levels of construction in the coming months.

Fourth quarter private bank loan data corroborated stable construction activity at the end of the year, increasing 0.8 percent quarter over quarter (QOQ). Multifamily investment climbed throughout 2019, rising 2.1 percent to $8.6 billion during 4Q2019. The one-to-four unit sector, however, stalled through the second half of the year after reaching a cycle-high in 2Q2019 of $7.7 billion.

Single-family construction permits started the year strong, increasing 3.2 percent to a post-recessionary high after a sluggish end to 2019. Texas led the nation with 11,100 nonseasonally adjusted permits, accounting for more than 17 percent of the U.S. total but ranking eighth in per capita issuance. At the metropolitan level, Houston topped the list with 3,565 permits, followed by DFW with 3,370. Austin permits increased to 1,472 while maintaining the highest per capita rate in the Texas Urban Triangle. In San Antonio, monthly permits surged to 846. Texas’ multifamily sector increased issuance in January but failed to recover to levels reached in 3Q2019 after falling at year end.

Decreased permitting activity in the last months of 2019 weighed on total Texas housing starts in January, falling 7.3 percent amid a drawback in the single-family sector. The trend, however, remained on a strong upward trajectory. Meanwhile, single-family private construction values dropped 11.1 percent to their lowest level since June 2019 after adjusting for inflation, corroborating loan value data. After reaching an all-time high in October, San Antonio construction values trended downward, comprising half of the monthly decrease. The metric declined for the second straight month in Austin and DFW. Houston values, however, reached an annual high after improving 3.3 percent.

Strong sales activity chipped away at the state’s supply of active listings. Texas’ months of inventory (MOI) fell for the third consecutive month to 3.4 months. A total MOI around six months is considered a balanced housing market. The MOI for homes priced less than $300,000 fell to 2.7 months, while inventory for luxury homes (those priced more than $500,000) remained elevated at eight months. This disparity exemplifies the shortage of affordable housing, although efforts have been made to more closely match demand and supply.

Inventory in the major metros was even more constrained than the statewide average. Austin’s MOI fell to an all-time low of two months, while the Dallas and Fort Worth MOIs ticked down to 2.9 and 2.4 months, respectively. San Antonio’s metric registered less than 3.4 months as inventory for homes priced less than $300,000 dropped to levels unseen in more than a year after gradual improvement during 4Q2019. Houston was the exception as the metro’s supply of active listings continued to rise despite strong sales activity, boosting inventory to 3.9 months.

Demand

Total housing sales during January flattened just below record levels reached at year end. Nonseasonally adjusted sales for home priced at the lower end of the market (less than $200,000), however, were well below the series’ January historical average. Sales volumes within the price range fell year over year (YOY) despite lower interest rates and solid demand fundamentals amid inventory constraints at the lower end of the market. Homes priced less than $200,000 constituted 36 percent of total monthly sales versus 72 percent in 2011.

Sales activity in the major metros cooled after accelerating during the fourth quarter. Houston sales corrected downward 2.2 percent from an all-time high in December, while Dallas monthly sales stabilized at a record 6,000 after increasing 11.3 percent at year end. In Austin, sales for homes priced $200,000-$400,000 stalled as inventory tightened after strong activity in 2019, pulling overall sales down 1.3 percent in the MSA. San Antonio extended a steady upward trend, although Fort Worth sales volumes flattened at their annual average.

Texas’ average days on market (DOM) stabilized at 59 days, indicating healthy demand. San Antonio and Houston’s DOMs hovered around the statewide level at 59 and 58 days, respectively. In Austin, the metric averaged 51 days, shedding ten days from its year-ago level. The DOMs in Dallas and Fort Worth trended upward for most of 2019 after low levels between 2015-17 but showed signs of stabilizing at 55 and 44 days, respectively.

After speculations of a U.S.-China trade truce supported modest increases in interest rates during 4Q2019, U.S.-Iranian military strikes and initial news of the coronavirus outbreak pulled rates down in January. Current economic fundamentals at the state and national level, however, remain healthy. The ten-year U.S. Treasury bond yield fell below 1.8 percent, while the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate decreased to 3.6 percent. After declining the previous month, mortgage applications for home purchases increased 9.1 percent. Refinance activity stumbled on the month, but the overall trend remained positive considering refinance mortgage applications nearly tripled during 2019.

Prices

The Texas median home price flattened to $247,200, although YOY growth hovered around 5.6 percent for the second straight month amid strong sales and inventory contractions. The nationwide existing-home median price increased 6.8 percent YOY to $283,200 compared with Texas’ existing-home price of $239,800. The gap between the U.S. and Texas new-home median price ($352,600 and $293,000, respectively) widened to $59,000 in January after averaging $30,000 in 2019.

Movements in the median home price varied on the metropolitan level. Houston and Austin each shed $1,900 off their median home price, pulling the metric down to $247,800 and $320,400, respectively, while the median price in San Antonio steadied at $236,200. North Texas, however, registered $5,800 and $9,000 increases in Dallas ($302,800) and Fort Worth ($254,200), respectively. The rise in the former may be explained by the recent surge in sales whereas the latter’s price hike is likely an upward correction after falling $7,600 over the previous two months.  

The Texas Repeat Sales Home Price Index, a better measure of changes in single-family home values, provides insight into how Texas home prices evolve. The index indicated more moderate annual home price appreciation of 3.6 percent. Strong demand and dwindling supply pushed Austin’s index up 5.9 percent YOY. Home prices in Houston and Fort Worth increased at a pace of 2.7 and 3.6 percent, respectively. Meanwhile, the Dallas and San Antonio indexes rose just 2.4 percent YOY each. Except for in Austin, home price growth in the major metros has stabilized at more moderate levels than during 2014-17. Persistent wage improvement that outpaces home price appreciation, however, is necessary to maintain overall housing affordability, which remains a challenge to the Texas home market.

Source – James P. Gaines, Luis B. Torres, Wesley Miller, and Paige Silva (March 10, 2020) https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-In…

January 2020 DFW Area Real Estate Stats

by ResourcesStatsVideo

The January 2020 DFW are real estate statistics are in and we’ve got the numbers! Take a look at our stats infographics, separated by county, with MLS area stats on each county report as well! These infographics and video are perfect for social sharing so feel free to post them!

To see past month’s reports, please visit our resources section here.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.