Housing-Insight-November-2022

Texas Housing Insight November 2022 Summary

by Real Estate ArticlesResourcesStats

The housing market continued to slow down as people consider mortgage rates and recession fears when making financial decisions. On the supply side, housing permits and housing starts are both in decline. Prices are correcting, and the market is accumulating inventory. However, as suggested by the sales volume, buyers are calmer now than during the pandemic frenzy, as many key indicators such as days on market (DOM) and months of inventory (MOI) are uniformly converging back to pre-pandemic levels. With the expectation of a higher mortgage interest rates annual average in 2023, existing-home sales will likely fall short of 2022’s levels.

Supply1

Homebuilders are initiating fewer building projects. The state’s year-to-date cumulative single-family construction permits in November 2022 had a net loss of 5.2 percent, shrinking from 157,043 to 148,954 units. The monthly drop paused in November, and construction permit issuance remained below 10,000 units. Construction permits rebounded in all major metros except Austin. Dallas (2,886 permits) gained more than 300 permits, while issuance in Houston (3,223 permits) stayed steady. Despite the slight decrease in Austin, the tech metro (1,341 permits) expanded residential space for single-family homes twice as fast as in San Antonio (663 permits). Construction generally slows during the winter, yet even after the seasonal adjustment, Texas’ single-family construction starts plummeted 28.5 percent from 2021 to 10,700 units, corroborating a slowdown in the housing industry.

The number of homes for sale typically declines after the summer peak. However, active listings have been quickly accumulating to a seasonally adjusted level of 91,600 units. Compared with the five-year average of 94,800 units before the pandemic, this November’s housing inventory level is only 4.5 percent away from rebounding back to the pre-pandemic volume, rather than 50 percent a year ago. Amid the rebound, Texas’ MOI ticked up to 2.9 months. Austin’s inventory level jumped to a ten-year high with 9,000 homes ready for sale, while Dallas’s housing supply was tight with 20,000 homes for sale, 3,700 fewer than in November 2019.

Demand

Total home sales inched down 3.3 percent month over month (MOM), settling at a seasonally adjusted rate of 26,800 closed sales (Table 1). Sales in Houston took a big hit, while sales in the other major metros stayed at October levels. Texas’ sales volume has shrunk by one tenth compared with a year earlier. As winter approaches, sales are expected to trend downward for the next two months.

Rising mortgage rates affect sales of differently prices homes disproportionately. Up to November, total sales for homes priced below $300K plummeted close to 30 percent in 2022, while total sales grew 15 percent for homes priced between $400K and $500K. The sales disparity between these two groups could suggest that rising rates sidelined more homebuyers in the lower-middle class than upper-middle class.

Amid slowing sales, homes are sitting on the market longer. Texas’ average DOM rose to 46 days. Compared with the five-year average of 59 days before 2020, the relatively brief period suggests the housing market is still relatively tight compared with historic norms. At the metropolitan level, Austin’s DOM rose most aggressively, doubling from 27 days in June to 57 days in November. Dallas’ DOM grew most moderately, rising from 25 to 42 days.

Before the pandemic, the state’s DOM ranged from 55 days to 83 days. Now, DOM ranged from 45 days to 52 days. The relatively truncated DOM interval implies the housing market still has room to improve. Another metric that signals the housing market can be more relaxed is DOM for pricier homes. Typically, the most expensive homes sit on the market the longest. However, DOM for homes priced over $750K was 45 days—shorter than homes in the $500K price cohort.

Prices

Texas’ median home price continued to fall, and the seasonally adjusted median price edged down 1 percent MOM. The four major metros posted mixed monthly changes (Table 2). Regardless of the depreciation in the past six months, the state’s median price remained 6.1 percent higher than year-ago levels. Dallas had the highest growth of 9.6 percent, while Austin’s growth rate deflated to 0.1 percent.

Since the Federal Reserve imposed the first 75-basis-point interest rate hike in June in an attempt to curb inflation, the ten-year U.S. Treasury bond yield jumped 129 basis points to 3.89 percent2, while the two-year counterpart surged by 150 basis points. The spread between the ten- and two-year bond yields widened while staying in negative territory, indicating persistent market uncertainties.

The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate moderated slightly this month to 6.81 percent, but it still surpassed historical rates during 2007 and 2009. According to a Wall Street Journal analysis, some buyers have had to dodge the conventional way of borrowing from traditional lenders and instead borrow directly from family members or leverage either business or personal assets. 

The Texas Repeat Sales Home Price Index accounts for compositional price effects and provides a better measure of changes in single-family home values. Compared with November 2021’s 19.5 percent year-over-year (YOY) increase, Texas’ index accelerated 9.2 percent YOY in November 2022, indicating price moderation. The same trend also affected the major metros as growth rates shrank from double-digits to single-digits, except in San Antonio, which was 12.8 percent. Moderating home prices corroborated with the Fed’s inflation fight.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, after last year’s historical low rates, the share of homeowners who were free from mortgage payments ticked up 3 percent to 36 percent in the U.S. and up 5 percent to 42 percent in Texas (Table 3). The share of homeowners who were caught up on payments increased as well.

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

2 Bond and mortgage interest rates are nonseasonally adjusted. Loan-to-value ratios, debt-to-income ratios, and the credit score component are also nonseasonally adjusted.

Source – Joshua Roberson and Weiling Yan (January 10, 2023)

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

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November 2022 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStats

November 2022 Stats are IN!

Active listings are up across the board with an increase of over 100% in Collin, Dallas, Denton, Rockwall and Tarrant counties compared to last year. It will come as no surprise that the average days on market has also increased in these counties over last year’s market. The number of sales in November has declined around 30% in each of the counties we report on compared to November 2021.

Although the real estate market is changing, North Texas continue to be one of the leading markets across the nation as we head into 2023. The National Association of REALTORS recently ranked the Dallas – Fort Worth – Arlington market as the #3 real estate market to watch next year.

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.

For more stats information, pdfs and graphics of our stats including detailed information by county, visit the Resources section on our website at DFW Area Real Estate Statistics | Republic Title of Texas.

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

Housing-Insight-October-2022

Texas Housing Insight October 2022 Summary

by Real Estate ArticlesResourcesStats

Since the Federal Reserve announced the first 75-basis-point increase in June of this year, the housing market has retreated with both demand and supply slowing down. Home sales were down 7.4 percent over the previous month, and housing starts for apartments doubled in a year as investors adapted their strategies from selling single-family homes to renting out apartments. As the Fed continues its aggressive inflation policies, mortgage rates will not drop until inflation is curbed. Home prices have been depreciating, and Austin—the metro that inflated the most during 2021—saw the largest depreciation amid the market’s abrupt slowdown.

Supply1

Texas’ single-family construction permits dropped below 10,000 units for the first time in two years. Despite slowing housing activities, Texas remained most active at authorizing construction projects, surpassing No. 2 Florida by one additional permit for every nine permits. Construction permits fell in all major metros except Houston. Dallas (2,545 permits) contracted by more than 700 permits in the past month, falling to a three-year low, while demand in Houston (3,226) stayed steady. As usual, Austin (1,380) was building homes twice as fast as San Antonio (629). Contrary to the weakened single-family sector, permits for Texas’ multifamily sector grew robustly. The number of issuances both for 2-4 family homes and apartments doubled from the year before.

The lumber producer price index (PPI) fell four times in the past six months, and the input cost had slid 17.6 percent since the year started. Since June’s interest rate rise, the South’s total housing starts plummeted quickly. However, this measure of new-home construction jumped to its highest level since bottoming out in June to 808,000 units in October, as housing starts inched up 6.7 percent month over month (MOM). Growth was driven largely by multi-unit construction permits while single-family units continued to stall.

While new homebuilding projects are slowing, the state’s current supplies have been accumulating. Active listings grew 6.6 percent MOM to a seasonally adjusted rate of 89,800 units. Compared with March’s inventory of 41,800 units, the metric has doubled, and the state has nearly recovered to the pre-pandemic level. Accordingly, Texas’ months of inventory (MOI) ticked up to 2.7 MOI. San Antonio led the pack with three MOI, followed closely by Austin. Dallas remained the tightest with 2.3 MOI. This trend suggests a cooler housing market, considering the conspicuously low inventories in the past two years.

Demand

Total home sales diminished 7.4 percent MOM, settling at a seasonally adjusted rate of 27,900 closed listings (Table 1). Texas’ four Metropolitan Statistical Areas (MSA) all mirrored the statewide trend, as sales in each metro shrank by double digits YOY. The rapid decline in housing sales has revealed how important low mortgage rates are to the latest housing frenzy. According to Texas Realtors’ Data Relevance Project, October sales were down 21 percent from a year earlier. At the current rate, year-end 2022 sales will likely fall short of 2021.

Amid this plunge in demand, the remaining buyers prefer new homes to existing homes. When sales were differentiated by the existing-home market and the new-construction market, the state’s cumulative sales volume plummeted 8.8 percent YTD in the former sector, while the same metric jumped 9.2 percent in the latter sector. The sales disparity was even more pronounced in Austin.

Closed listings for homes priced below $300K fell below 10,000 transactions for the first time in a decade, falling close to 50 percent compared with February 2020. This is partially due to the fallen overall demand but more because of the rapid appreciation brought by the housing frenzy. Due to the rapidly rising price, the market share for home sales in this price cohort fell from 84 percent to 39 percent in the past ten years.

Homes are sitting on the market longer as a result of slowing sales. Texas’ average days on market (DOM) balanced at 42 days. DOM ranged from 37 days in Dallas to 47 days in San Antonio. Despite the prolonged waiting time, compared with the five-year average of 59 days before 2020, the relatively short period suggests the housing market is still relatively tight compared with historic norms.

Additionally, in February 2020 DOM ranged from 55 days to 83 days respectively for homes in the median price cohort and in the higher-end tail. In September 2022, the DOM interval was 43 to 44 days. The truncated DOM interval both in terms of value and difference of the two price cohorts implies the housing market still has ample room to fully return to the normal level.

Prices

After a mild moderation in September, Texas’ median home price continued to decline. The state’s seasonally adjusted median price edged down to $338,000, decreasing 1.6 percent MOM. The four major metros posted mixed monthly changes (Table 2). Regardless of the recent depreciation, prices in these MSAs remained higher than their year-ago levels, with the lowest growth in Austin at 4.8 percent and highest in Dallas at 11.1 percent.

As the Federal Reserve imposed forceful monetary policies to curb inflation, the ten-year U.S. Treasury bond yield jumped to 3.98 percent2, while the two-year counterpart surged by a similar amount. The spread difference between the ten-year and two-year bond yields widened slightly while staying in negative territory, indicating persistent market uncertainties. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate elevated further to a 20-year high at 6.9 percent. This rate surpassed all historical rates during 2007 and 2009.

Rapidly rising mortgage rates diminished purchasing power and sidelined many prospective buyers. According to the Mortgage Bankers Association, mortgage applications for new-home purchases plummeted more than one fourth from year-ago levels, and the national median payment rose 3.7 percent to $2,012 in October. According to a Wall Street Journal analysis, some buyers have had to dodge the conventional way of borrowing from traditional lenders and instead borrow directly from family members or leverage either business or personal assets.

The Texas Repeat Sales Home Price Index, which accounts for compositional price effects, corroborated the trend of mixed responses in major metros, with Fort Worth falling 1 percent MOM and San Antonio rising 0.3 percent MOM. On the year-to-year levels, the annual appreciation ranged from 3.7 percent to 10.8 percent, with Austin growing the least and Dallas leading the pack.

Household Pulse Survey

The U.S. Census Bureau’s Household Pulse Survey indicates that despite rapidly rising mortgage rates, the share of Texas homeowners behind on their mortgage payments stayed at 4 percent as in September (Table 3), on par with the national level. This implies that while the outlook on the overall housing market dimmed, homeowners’ financial health remained healthy. Texas owners especially bolstered their housing status, as the owned free/clear homes rose 4 percentage points above the national average. Fewer Texas homeowners reported the possibility of foreclosure on average as the proportion of delinquent individuals at risk of foreclosure dropped to 4 percent (Table 4). These numbers suggested many prospective homebuyers, who were initially not confident about their financial stability, may have opted out of buying a house during this period.

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

2 Bond and mortgage interest rates are nonseasonally adjusted. Loan-to-value ratios, debt-to-income ratios, and the credit score component are also nonseasonally adjusted.

Source – Joshua Roberson, Weiling Yan, and John Shaunfield (December 7, 2022)

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

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October 2022 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStats

October 2022 Stats are IN!

In Collin and Denton counties, all arrows are pointing up in the areas of new listings and active listings with active listing seeing an increase of over 100% in both counties compared to last year. It will come as no surprise that the average days on market has also increased in these counties over last year’s market. What we are all seeing in the news is reflected in the number of sales in October which has declined between 25 and 30%.

In Dallas and Tarrant counties, we are seeing similar trends, however, new listings are down by about 10% in both counties. Active listings are down 39% in Dallas County and up 82% in Tarrant County. Average sales prices are up 16.7% in Dallas and 14.2% in Tarrant. Again, the number of sales is down by approximately 30% in both of these counties.

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.

For more stats information, pdfs and graphics of our stats including detailed information by county, visit the Resources section on our website at DFW Area Real Estate Statistics | Republic Title of Texas.

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

Slide1

September 2022 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStats

September 2022 Stats are IN!

In Collin County, all arrows point up with regard to new and active listings, average sales price, average price per square foot and days on market. The number of sales is down about 26% from 2021. In Dallas County, new listings are down 5.5% from this time last year, along with the number of sales down almost 23% from 2021. The number of active listings is up 22.5% from last year, along with increases in days on market (up 27%), averages sales price (up 9%) from the prior year and prices per square foot (up 16%). Denton County sees the biggest increase in active listings up over 100% from last year, along with increases in new listings, average sales price, average price per square foot and days on market. Not surprisingly, we see much of the same statistics in Rockwall and Tarrant Counties.

The good news is that buyers have more options than they did in 2021. However, even with the increased inventory, there is still only an average of 2.5 month supply in all counties (according to NTREIS TRENDS report) which still makes it very much a sellers’ market in North Texas (with people still moving here)! Happy Selling!

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.

For more stats information, pdfs and graphics of our stats including detailed information by county, visit the Resources section on our website at DFW Area Real Estate Statistics | Republic Title of Texas.

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

Housing-Insight-August-2022

Texas Housing Insight August 2022 Summary

by Real Estate ArticlesResourcesStats

The pandemic-induced housing frenzy is easing as the Fed’s aggressive monetary policies directly affect the housing market. Mortgage interest rates rose from 2.84 to 5.22 percent in the past year. Amid these robust rate increases, Texas’ housing market quickly dialed back sales while supplies have gradually accumulated. Despite the slowdown, inventory levels remain below historical levels, and prices are still high. While prices have dipped some in recent months, they still remain considerably high compared with before the pandemic. As of August, Texas’ median price remains 11.4 percent elevated from a year earlier.

Supply1

Interest rates continued to increase following more aggressive Federal Reserve intervention. Despite mounting interest rate pressure, Texas’ single-family construction permits recovered 12,500 permits in August, rising 9.3 percent month over month (MOM). Permits rebounded in three of the state’s four largest metros (San Antonio being the exception). Houston (3,700) and Dallas (3,693) had the most permits, while Austin (1,609) and San Antonio (681) followed third and fourth in the state. Meanwhile, Texas’ single-family construction values continued to fall by double digits, tumbling to a two-year low. All major metros reported double-digit negative year-to-date (YTD) growth.

Permits for Texas’ multifamily sector corrected. After July’s abnormally high request of 12,500 construction permits, 9,000 permits were issued in August.

Total overall housing starts in the Southern Census Bureau Region also recovered some in August with 885,000 new starts. However, single-family housing starts, which account for the biggest share of the overall count, remained 100,000 units short of the year-ago average with 530,000. August’s boost could be partially explained by declining input costs such as lumber. The lumber producer price index (PPI) decreased for the third time in a row in August.

In the existing-home market, the state’s current supply has accumulated throughout the summer. Active listings rose more than 30,000 units since May. This loosening up of housing availability indicates a break-through considering the distinctly low inventories of the past two years. Texas’ housing supply, which had been below two months of inventory (MOI) from November 2020 to June 2022, ticked up to 2.4 months. San Antonio led with 2.7 months, and Dallas remained the tightest with two months (Table 1). The Texas Real Estate Research Center considers six to 6.5 months of inventory a balanced market.

Demand

As a result of higher mortgage rates, housing demand has fallen, and homes are sitting on the market longer. Sales improved slightly in August (5 percent MOM) from July’s steep decline, reaching a seasonally adjusted rate of 29,300 sales. Overall home sales have been in freefall since around April. At the current rate, 2022 sales will likely fall short of 2021. According to the Center’s Data Relevance Program, the sales level was down 16.3 percent from a year earlier.

Sales in all major metros remained low as mortgage pressures rattled buyers. Austin and Houston’s closed listings were most affected with a 20 percent year-over-year (YOY) reduction, while DFW and San Antonio pulled back more than 10 percent. Existing-home sales, which make up 80 percent of Texas’ housing market, inched down for the seventh straight month. Texas’ marginal recovery in August was concentrated in the remaining 20 percent of the housing market, where Dallas’ new-construction market had double-digit growth.

Texas’ average days on market (DOM) was 38 days, up from 29 days in March. However, compared with the five-year average of 57 days between 2014 and the early 2020s, the relatively short time suggests a persistent imbalance between sellers’ and buyers’ bargaining-power. Amid slowing sales, Austin’s market reacted most aggressively, doubling the listing time in the past five months, while DFW reacted most moderately.

When days on market are differentiated based on the home market, the existing homes’ DOMs are conspicuously lower than new homes’. This could possibly be due to differing price points as new homes tend to be more expensive than the average existing-home listing. Categorized by price cohorts, homes priced between $300K and $500K had the shortest listing time, taken off list in 34 days.

Prices

The downward trend for Texas’ median home price continued in August. The state’s seasonally adjusted median price was $342,000, falling more than $10,000 in three months. Prices dropped in all metros except San Antonio, which advanced $2,000 this month (Table 2). Dallas and Houston, Texas’ two largest MSA areas, reported modest declines of $2,000, while Austin took the biggest hit of $11,000. Although housing prices are recently under correction, they remain much elevated from year-ago prices, accelerating 11.4 percent YOY. Even for Austin, the price in this much-affected market was up 5.5 percent YOY.

The Federal Reserve is expected to impose more forceful monetary policies throughout the latter half of this year and likely into the upcoming year to combat inflation. While the ten-year U.S. Treasury bond yield persisted at 2.9 percent2, the two-year counterpart continued to march upward. The spread between the ten-year and the two-year bond yields dipped further in the negative territory, indicating the market’s economic uncertainties about the near future. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate refrained from June’s high of 5.52 percent and slipped 30 basis points in the past two months. The last time the mortgage rate was over 5 percent was 2009. For more information on the effect of mortgage interest rates on purchase affordability, see “How Higher Interest Rates Affect Homebuying.” 

The Texas Repeat Sales Home Price Index, which accounts for compositional price effects, corroborated the trend of depreciation. The index’s monthly decline was the second in a row. Annual appreciation slowed to 12.1 percent YOY in August compared with 20.4 percent YOY growth in January. While Dallas’ home price index remained above the state average, Austin’s YOY rate fell to a single digit, behind Houston’s yearly growth and down to the slowest appreciating metro.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, in spite of rising mortgage rates, the share of Texas homeowners current on their mortgage payments improved 60 basis points in August, and the percentage of people who were behind shrunk to 4 percent (Table 3). This implies that while the overall economy continues to decline, homeowner financial health has so far remained robust. Houston owners’ bolstered ability to pay their mortgage resulted in an increase in the state’s average owned free/clear homes ratio. On the other hand, when asked about future payments, fewer Texas homeowners were confident that they would not face foreclosure. The proportion of delinquent individuals at risk of foreclosure shot up 80 basis points to 8 percent (Table 4).

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

2 Bond and mortgage interest rates are nonseasonally adjusted. 

Source – Joshua Roberson, Weiling Yan, and John Shaunfield (September 29, 2022)

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

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August 2022 DFW Area Real Estate Stats

by ResourcesStatsVideo

August 2022 Stats are IN! Here are the highlights! In Collin County New listings are slightly down, while Active listings are up quite a bit from last year. The days on market, average sales price and price per square foot are also up as we are all aware, with the actual number of sales down about 21% from 2021. In Dallas County, the new listings are also down slightly with Active listings up with similar percentages to Collin County. The days on market, average sales price and price per square foot are also up in Dallas with the number of sales down about 15% from last year. The statistics are about the same in Denton and Rockwall counites as you can see. In summary, while the market is definitely slower than 2021, we are still experiencing a shortage of homes for sale in the entire metroplex which makes it a great time be in the business in North Texas! Happy sharing and selling!

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.

For more stats information, pdfs and graphics of our stats including detailed information by county, visit the Resources section on our website at DFW Area Real Estate Statistics | Republic Title of Texas.

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

Housing-Insight-June-2022

Texas Housing Insight June 2022 Summary

by Real Estate ArticlesResourcesStats

Texas’ housing market continues to cool as sales volume declines and housing inventories rise. While the pace of new listings begins to overcome housing sales, home prices are still elevated due to the tremendous housing pressures realized after the start of the COVID-19 pandemic. Even though home prices are still high, price growth is now retreating, providing a respite for potential buyers.

Supply*

According to Zonda, supply-side activities at the earliest stage of the construction cycle flattened at first quarter levels as inventory losses in Austin’s vacant developed lots (VDLs) offset gains in Dallas, Houston, and San Antonio. The number of new VDLs in Austin shrank 24 percent from last year’s quarterly average. Lot development in the $300k-$500k price cohort composed half of Austin’s total VDL investment, but it saw a double-digit reduction quarter over quarter (QOQ) while the same investment cohorts in other metros advanced.

Starting in May, Texas’ single-family construction permits retreated below 15,000 per month, declining 5.2 percent QOQ. Building permits fell significantly in Austin and Houston. Despite the drop, Houston and DFW remained the top two metropolitan areas on the national permit list. Each had a seasonally adjusted rate of over 4,000 permits for new-structure building or existing-structure renovation. In Central Texas, Austin issued 1,800 permits, while San Antonio issued 900. Meanwhile, Texas’ multifamily sector surged to 9,900 construction permits in June, the highest level since 2015. Permits for two-to-four units and five-or-more units expanded at 39.8 percent and 26.3 percent QOQ, respectively.

Lumber price trended downward, declining 19.6 percent in a month. As the lumber price reduction lowered the framing cost by nearly one fifth, total Texas housing starts increased 6.2 percent QOQ. Zonda data revealed roughly 38,800 homes broke ground in the major metros over 2Q2022. Amid the construction expansion, all metros saw an uptick except Houston, where housing starts contracted 1.5 percent. Dallas had the most housing starts and luxury home construction projects. For every six houses built in the median price cohort of $400k-$499k, one house priced over $1 million was built. While housing starts inched up, single-family private construction values tumbled to a six-month low, corroborating the lowered construction costs. All major metros except San Antonio reported negative quarterly growths. 

While Texas’ overall housing supply remains historically low, inventory throughout the state is currently on the rise. Texas’ months of inventory (MOI) has gradually increased over the past few months, doubling from one month in February to two months in June. At the metropolitan level, inventories grew most robustly in Austin. Austin’s MOI surpassed DFW’s and Houston’s for the first time since 2019. By price cohort, inventories jumped for homes priced between $300,000 and $500,000.

Prices

The Texas median home price may have reached a peak as the June value leveled out at a seasonally adjusted rate of $349,000, which is $3,000 below May and the first drop in home prices since December 2020. While home price growth may be slowing, current prices remain significantly higher than before the pandemic. Except for San Antonio, each of the big four metros had a slight dip in median home prices for June. Austin had the largest seasonally adjusted single-month dip in June at 3.7 percent, while DFW fell 0.8 percent.

The Texas Repeat Sales Home Price Index, which accounts for compositional price effects, corroborated substantial home-price appreciation as the index inched up 17.1 percent year over year (YOY). The falling prices pulled down YOY statewide growth by 3 percent in the last six months. Austin fell from the fastest appreciating metro to third place behind Dallas and Fort Worth.

The Texas Housing Affordability Index (THAI) reflects the relationship between the median family income in a locale and the computed amount required to purchase a median-priced home. A higher THAI indicates relatively greater affordability. Measured by the THAI metric for first-time homebuyers, Houston was the most affordable metro, followed by San Antonio, Fort Worth, Dallas, and Austin, respectively. Despite the marginal median price decline, Austin remained the most unaffordable metro in the state.

Demand

Record home prices and rapidly rising mortgage rates continued to discourage buyers and cool the market. In June, over 37,000 homes were sold throughout the state, 9.4 percent below June 2021 sales. According to seasonally adjusted sale estimates, the slowdown actually began in January of this year, but June had the biggest single-month dip. Even though June sales were down from last year, they’re almost identical to June 2019 sales, which was the last record-setting year before COVID. The drop in home sales coincides with the rapid increase in mortgage rates that began in January but picked up steam in recent months.

Because of softening housing demand, Texas’ average days on market (DOM) has begun to creep up. Seasonally adjusted DOM increased to 34 days, up from 28 days in March. Normally, home sales accelerate in the summer and DOM decreases. That has not happened this summer. Homes sold the fastest in Austin and Dallas, leaving the market in 21 days. Houston’s and San Antonio’s DOMs remained around a month. The DOM for new homes was notably higher than the DOM for existing homes, especially in the Houston area, where new homes on average lasted 60 days on the market while existing homes lasted 23 days. 

Homes priced in the $300k and the $400k cohorts were fastest at getting sold, typically leaving the market in 27 days. On the other hand, homes under $300k had a conspicuously longer market duration.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, homeowners are benefiting from last year’s low-interest loans and rising wages. The share of homeowners behind on mortgage payments shrank 1 percent YOY at both the national and state levels (Table 1). Owners’ improved ability to pay their mortgage was notable in Dallas and Houston, as owned free/clear homes in each metro had a 4 percent increase YOY. Furthermore, fewer Texas homeowners who struggled to keep up with mortgage payments faced the possibility of foreclosure. The proportion of delinquent individuals at risk of foreclosure plummeted 70 basis points to 2 percent (Table 2). The share who were “not very likely” to leave their homes in the next two months rose 17 percentage points to 61 percent in Dallas.

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

Source – Joshua Roberson, Weiling Yan, and Rajendra Patidar (August 17, 2022)

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

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July 2022 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStatsVideo

July stats are here and we have the numbers! 

Home prices continue to increase in North Texas! Collin County leads the pack with an average price of $602,166 which is up 19.2% over July 2021. According to a report from Texas Realtors, house prices are climbing faster in North Texas than they are in any other Texas metro area. The good news is that active listings are also up in each county including 3,532 active listings in Collin County (up 69.1% over July 2021) to 3,370 active listings in Denton County (up 77.4% over July 2021).  

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.

For more stats information, pdfs and graphics of our stats including detailed information by county, visit the Resources section on our website at DFW Area Real Estate Statistics | Republic Title of Texas.

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

Housing-Insight-May-2022

Texas Housing Insight May 2022 Summary

by Real Estate ArticlesResourcesStats

Both U.S. and Texas’ construction permits shrank, posting the third decline in the last four months, signaling a future slowdown in national and state homebuilding. Although the projection on Texas’ year-end supplies decelerated, current supplies expanded as new listings and active listings grew. Record-high housing prices and robustly rising mortgage rates deterred many potential buyers. Housing sales lost nearly 5,600 transactions from January’s record level, shrinking 14.5 percent. Price disparities were conspicuous between Austin’s new-home and existing-home markets. Prices for the former were considerably less than the latter as pressure in the existing market intensified.

Supply1

Texas had been the No. 1 state for issuing housing permits since May 2006. In 2022, for every six single-family homebuilding permits issued in the U.S., one permit originated in Texas. Despite the large market share, under the projection of cooling housing markets, both national and Texas permits had a mid-single-digit reduction in May. The Lone Star State retreated 1,000 permits to a seasonally adjusted (SA) monthly rate of 15,000 units. Dallas—the second largest metro on the national list—contracted by 700 permits for the month. Furthermore, multifamily construction permits for Texas’ two-to-four units and five-plus units saw a double-digit reduction. This signals a forthcoming deceleration of housing supplies.

Lumber prices moderated at April’s price level, falling 14.5 percent year-over-year (YOY). Texas’ total housing starts hit a three-decade high last month with 26,915 SA units. The number returned to the year-ago average, hovering around 20,000 SA units this month. As starts for housing projects dipped, Texas’ single-family private construction values fell 10.4 percent month-over-month (MOM) to $3.7 billion, the largest monthly decline since last July. Private construction values shrunk in all metros except Austin as finished projects exited the local construction market faster than new projects entered. Although only falling marginally in May at an annualized rate, Dallas’ single-family construction appears to have lost momentum compared with Houston.

While new listings for existing homes continue to climb, new listings for new construction through the Multiple Listing Services (MLS) grew aggressively at 17.5 percent MOM. Overall, new listings grew for all four major metros and across all price cohorts. Overall active listings reflected the same trend. The rising number of homes ready for sale pulled Texas’ months of inventory (MOI) up to 1.5 months. A six-month MOI is considered a balanced housing market (Table 1). After hovering below the one-month benchmark for 19 consecutive months (since October 2020) and hitting a record low of 13 days in May 2021, Austin’s MOI finally rebounded above 31 days. The rising MOI means the sales pace to the number of available properties is improving. As Texas’ housing market frenzy started to ease, MOIs in the major metros all advanced four to ten days.

Prices

Although housing inventories slowly started to build up, housing prices did not immediately reflect the supply shift. The Texas median home price hit a record high every month starting in January 2021, and the median price rose to a record-breaking $354,000 this month, climbing over 25 percent since the beginning of 2021 (Table 2). All metros hit new price levels. Austin ($534,000) and Dallas ($446,000) were the two most expensive metros in which to own a single-family home. Amid all expanding metros, the median price growth was most notable in Austin where it rose almost 40 percent since January 2021. Data suggest in Austin it may be more affordable to buy a new home than hunt for an existing one. The median price for new homes sold in Austin through the MLS was $437,000, more than $100,000 less than the price of existing homes. In either case, housing in Austin is still out of reach for many potential buyers. Median prices in San Antonio ($337,000), Houston ($341,000), and Fort Worth ($373,000) advanced at a double-digit rate, albeit at a slower rate.

The Federal Reserve is expected to reduce its balance sheet assets and increase the Federal Funds rate several more times by the end of 2022. The ten-year U.S. Treasury bond yield shot up to 2.9 percent2, increasing 15 basis points in one month. The spread difference between the ten-year and the two-year bond yields rebounded 7 basis points to 0.3 percent, yet the spread between the two was still alarmingly low, signaling economic uncertainties and rising risks in the near future. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate, which for years hovered around 3 percent, elevated to 5.23 percent. The last time the mortgage rate was this high was in 2008. For more information on the effect of mortgage interest rates on purchase affordability, see “How Higher Interest Rates Affect Homebuying.”

The Texas Repeat Sales Home Price Index accounts for compositional price effects and provides a better measure of changes in single-family home values. Texas’ index corroborated substantial and unsustainable home-price appreciation, soaring 18.7 percent YOY. Dallas’ and Fort Worth’s index rose 26.4 and 24.6 percent, respectively, as home-price appreciation shot up in North Texas. Meanwhile, the metrics climbed around 19 percent in a year for the other three metros. Increasing home prices pressure housing affordability, particularly in an economic environment where mortgage rates are hiking and real wage growths are slow.

Demand

Record home prices and rapidly rising mortgage rates discouraged buyers and cooled the market. According to the MLS, total Texas housing sales peaked in January with nearly 39,000 transactions. Sales have declined each month since then. Total housing sales fell to a seasonally adjusted rate of 33,097, down 1,080 deals from April’s housing transactions. Sales in all major metros declined under the price pressures. Houston closed 9,100 sales, contributing one-third of the state’s total lost transactions. Dallas followed with 5,700 closed deals. Austin, Fort Worth, and San Antonio hovered around 3,000 units, each losing around 100 home transactions. Home appreciation drastically changed the price structure of home purchases. Housing sales slipped by double-digit percent for homes priced below $400,000, while transactions for more expensive homes (greater than $750,000) accelerated for the sixth month.

Texas’ average days on market (DOM) inched down to 28 days, the lowest on record. The historical low DOM indicated buyers’ eagerness to own a house. Austin and North Texas’ home purchases were the most frequent, closing in 20 days. Houston and San Antonio’s DOM inched down to 29 and 30 days, respectively. When days on market were differentiated based on the home market, the new home’s DOMs were notably higher than existing home’s, especially in the Houston area where homes lasted 61 days on average in the former market and 23 days in the latter. The existing-home market is hot. 

Homes in the $300K and $400K price cohorts sold fastest, typically leaving the market in 27 days. Homes under $300K had a longer market duration. Many of these homes may be older and not market-ready.

Note: Data collection for Household Pulse Survey was paused in May because the U.S. Census Bureau was making survey revisions. The survey analysis will resume in June.

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1 All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.
2 Bond and mortgage interest rates are nonseasonally adjusted. Loan-to-value ratios, debt-to-income ratios, and the credit score component are also nonseasonally adjusted.

Source – Joshua Roberson and Weiling Yan (July 25, 2022)

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