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June 2022 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStatsVideo

June stats are here and we have the numbers! 

In June, home inventory increased in each county with new listings up ranging from 6% to 32% over June 2021. There is also an increase in inventory compared to last month in each county which is welcome as the DFW housing market has experienced tight supply conditions for some time. Average sales prices are up ranging from 15% in Dallas County to 27.9% in Collin County compared to June 2021. According to the Home Buying Institute, we are still in a seller’s market, but “these recent trends should make things a bit easier for buyers going forward”.

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-April-2022

Texas Housing Insight April 2022 Summary

by Real Estate ArticlesResourcesStats

Record housing prices and rapidly rising mortgage rates are making homebuyers reconsider the value of home purchases. In April, the median single-family price climbed to almost $350,000 in Texas, and the national mortgage rate rose almost 2 percent in the span of one year, making home purchases a challenge especially for first-time buyers. Seasonally adjusted home sales declined for three consecutive months since January’s peak, and the weighted loss on homes valued less than $300,000 reflected first-time buyers’ pause. Meanwhile, more expensive homes had a marginal sales increase. The unusually low inventories persisted. However, demand in building permits rebounded in April. The growing future supplies and the steep borrowing rates are expected to slow home-price growth and cool the frenetic housing market.

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The Residential Construction Cycle (Coincident) Index, which measures current construction levels, trended upward nationally and in Texas due to increased industry wages, employment, and construction values. Both the Texas and U.S. Residential Construction Leading Index indicated construction activity is expected to strengthen in the coming months as weighted building permits and employment continue to elevate.

Building permits for U.S. future single-family homes decreased for the second month, signaling a cooling housing market at the national level. In Texas, on the other hand, permits rebounded to a seasonally adjusted (SA) monthly rate of 16,000 units after March’s marginal decrease. Houston and Dallas topped the national list with 4,800 and 4,700 non-seasonally adjusted permits, respectively. Austin and San Antonio issued 2,100 and 1,400 permits, respectively. In Texas’ multifamily sector, increased April permits revealed leading growth in two-to-four units.

Unlike last year’s series of price hikes when winter ended and construction season started, lumber price moderated in April, falling sharply with a double-digit decline from March. Supported by the sudden drop of building input costs, Texas’ total housing starts rebounded this month along with construction starts in the southern region of the U.S. As housing starts inched up, Texas’ single-family construction values increased 2.7 percent month-over-month (MOM). However, they were down for the 11th month compared with year-ago values. At the state level, private construction values in 2022 were all lower than 2021’s same-period values. At the metropolitan level, private construction values were mixed, with Dallas and San Antonio falling from mid-2021 peaks and Houston and Austin surpassing previous values and peaking in early 2022. Austin and Houston increased 11.6 and 8 percent year-to-date (YTD), respectively, while Dallas and San Antonio registered losses.

New listings for existing and new construction expanded in April. New-home listings were up 7,200 SA compared with 2021’s monthly average of 6,200 units. Total active listings had a10.4 percent MOM hike, pulling Texas’ months of inventory (MOI) up to 1.3 months (Table 1). Before March, the state’s MOI fell five consecutive months to a record low of 1.2 months (a total MOI around six months is considered a balanced housing market). The rebound was evident for every price cohort, and it signaled a less heated housing market. The rebound was most significant for homes priced between $500,000 and $749,999 with 0.3 months lengthened market time. Homes priced under $400,000 remained the most constrained with 1.2 months, and the expansion for this price cohort was moderate.

April’s MOI metrics of the major metros broke down the trend of the statewide metric. MOI was up in every major metro in April as active listings expanded. Austin had the largest monthly gain in active listings (30.8 percent), while Houston grew 9.2 percent to a rate of 12,800 SA units, contributing nearly one-third of the state’s total housing inventories. Dallas and Fort Worth, which flattened at record-low MOI’s for all three months in 2022Q1, rose for the first time this year. Furthermore, new listings in San Antonio made up 93 percent of the metro’s record supply in December 2021, signaling more sellers had entered the local housing market.

Prices

A shift in the composition of sales toward higher-priced homes due to constrained inventories at the lower end of the market contributed to home-price appreciation. The Texas median home price continuously hit record highs starting in January 2021, and the median price rose to a record-breaking $349,000 this month, climbing over 25 percent since then. Austin ($530,000) and Dallas ($439,000) 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 at 37.6 percent. The tech metro’s exponential growth brought the price gap between Austin and Dallas from $49,000 in January 2021 to $91,000 in April 2022. Meanwhile, median prices in San Antonio ($325,000), Houston ($337,000), and Fort Worth ($370,000) advanced at a double-digit rate. Houston was the slowest at raising its housing price in terms of price per square foot since 2010.

The Federal Reserve is expected to reduce its balance sheet assets and increase the Federal Funds rate at least six more times in 2022. The ten-year U.S. Treasury bond yield shot up to 2.75 percent2 in April, increasing 62 basis points in one month. The spread difference between the ten-year and the two-year bond yields shrunk to 21 basis points, the lowest since February 2020. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate, which for years hovered around 3 percent, elevated to 4.98 percent this month. Rising interest rates deterred potential borrowers, and as a result the loan counts for both the GSE and non-GSE loans shrunk by half.

The Texas Repeat Sales Home Price Index accounts for compositional price effects and provides a better measure of changes in single-family home values due to changes in market forces alone. Texas’ index corroborated substantial and unsustainable home-price appreciation, soaring 19.9 percent YOY. Dallas’ and Fort Worth’s index rose 27.7 and 25 percent, respectively, as home-price appreciation shot up in North Texas. Meanwhile, the metrics climbed around 20 percent in a year for the other three major metros. Increasing home prices pressures housing affordability, particularly in an environment of mortgage rate hikes and low real wage growth.

Demand

According to the Multiple Listing Service (MLS), seasonally adjusted total housing sales peaked in January with nearly 39,000 transactions in the state. Sales have declined monthly since then. In April, total housing sales fell to 34,000 closed listings. Sales in all major metros declined under the price pressures. Houston had 9,500 sales in April, down 1,400 from the January record. Dallas followed with 5,800 closed deals. Austin, Fort Worth, and San Antonio hovered around 3,000 sales, each losing hundreds of home transactions.

Home appreciation drastically changed the price structure of housing sales. Sales slipped 6.2 percent for homes priced below $500,000, while transactions for more expensive homes increased about 1 percent. The slip weighed heavily on homes priced below $300,000, and the market share for these homes shrank from 50 percent April 2021 to 35 percent.

Texas’ average days on market (DOM) inched down to 30 days after a small rebound in February. In Austin and North Texas, the average home sold fastest, staying on the market for only 21 days. San Antonio’s DOM matched the statewide metric, while Houston’s steadied at 34 days. Categorized by price cohorts, homes priced in the $300K cohort sold fastest, typically leaving the market in 28 days. Homes less than $300K had a conspicuously longer market duration. Despite major housing shortages in affordable housing, many of these homes, which had below-average asking prices and above-average DOMs, may be in poorer condition than normal market expectations, illustrating the limits to housing demand.

Household Pulse Survey

More Texas homeowners were on pace with mortgage payments. According to the U.S. Census Bureau’s Household Pulse Survey, the share of Texas homeowners behind on their mortgage payments inched down from last April, along with the national average (Table 2). DFW’s metric also ticked down, while Houston’s rate remained unchanged. The share of Texas respondents who were either very likely or somewhat likely to forfeit in the next two months was at 11 percent, while nationally it was 19 percent (Table 3). The proportion of delinquent individuals who were at little of foreclosure was optimistic in North Texas. The metric was less upbeat in Houston.

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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 1, 2022)

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

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May 2022 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStatsVideo

May stats are here and we have the numbers! 

Inventory is increasing with new listings up in Collin, Dallas, Denton, and Tarrant Counties over April 2022. Average sales prices are up ranging from 14% in Dallas County to 26% in Rockwall County compared to May 2021. Average days on market across the five counties in North Texas was 18 days which is down in each county over 2021. According to the Dallas Business Journal, the DFW housing market had the largest increase in the close-to-list price ratio (average value of the sales price divided by the list price for each transaction) in the U.S. year-over-year with a close-to-list ratio of 104.7% compared to 98.4% in May 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-March-2022

Texas Housing Insight March 2022 Summary

by Real Estate ArticlesResourcesStats

Total Texas housing sales continued to grow, increasing by 3.4 percent in the first quarter. Sales were concentrated on homes priced over $300,000. The constrained inventory in the lower-priced cohort pushed the median housing prices to a record-breaking level. Despite rising mortgage rates, housing market demand remains robust, driven largely by demographics. As building material costs (notably for lumber) continued to increase, so did housing starts.

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The Residential Construction Cycle (Coincident) Index, which measures current construction levels, increased slightly for both Texas and the U.S. as construction employment, wages, and output remained elevated. Construction activity is expected to continue expanding according to the Texas Residential Construction Leading Index (RCLI). Despite increases in the interest rates, the pace of new building permits and housing starts is expected to push the new home market forward at least for the immediate future.

According to Metrostudy data, after hitting a record high in the last quarter, the supply side contracted at the earliest stage of the construction cycle in the number of new vacant developed lots (VDLs). Despite a 26.3 percent elevation in San Antonio’s lot development, the depressed activity in DFW and Houston outweighed the gain. The contraction was most notable in lots priced between $200,000 and $299,000 for both metros, and DFW accounted for most of the quarterly loss due to reduced investment across all price cohorts, except in lots priced above $500,000.

Quarterly growth in single-family construction permits remained steady, hiking to 10.4 percent quarter over quarter (QOQ). All metros posted positive seasonally adjusted growth. Houston and DFW were standouts not only in Texas but also compared with other metros nationwide. Austin edged out San Antonio building permit output with 6,000 permits. Texas’ multifamily sector registered a moderate expansion with 15.06 percent QOQ increase as issuance shifted from two to four units to five or more units.

In 1Q2022, lumber prices continued the latest wave of rises, hiking steeply at 34 percent. In spite of the lumber price disruption for new home construction, total Texas housing starts still grew by a narrow margin of 1.7 percent. Among the 36,000 homes that broke ground in the Texas Triangle, 80 percent were appraised at over $300K. Moreover, Dallas had the most growth in housing starts ($500K+), followed by Austin and Houston ($400K-$499K), and San Antonio ($300K-$399K).  

Single-family private construction values increased 7.8 percent QOQ in real terms as the metric trended upward in Texas’ major metros. Houston’s average total cost for building construction surpassed Dallas’ in September 2021, and since then it had been the highest among all the Texas metros. Austin registered a sharp increase of 19.2 percent, while the other metros advanced incrementally.

The number of homes added to the Texas Multiple Listing Services expanded in March with 9,700 listings. Despite this inventory expansion, compared with 1.2 months in 2021Q4, Texas’ months of inventory (MOI) still deflated due to fast turnovers. Homes priced in the $200s had the tightest inventory at 0.8 months for the first quarter.

Both Austin and DFW remained below one month’s inventory, at 0.5 and 0.8 months, respectively. Houston and San Antonio trailed slightly above the one-month mark, at 1.1 and 1.2 months respectively. Inventory levels in each of the big four metros continued to drop over the latest quarter with the exception of DFW, which may have bottomed out.

Demand

While the national demand for housing declined marginally, demand in Texas accelerated, elevating the state total housing sales by 3.4 percent QOQ to 110,737 closed listings. Sales for homes priced above $500,000 continued climbing at an impressive rate, and the luxury home market share jumped to 24 percent with almost as many sales as homes priced from $200,000 to $299,999.

Total quarterly sales expanded in Texas largely due to massive growth in Houston, over 10 percent QOQ. San Antonio grew at a more modest rate of 2.7 percent, while both Austin and DFW contracted. Statewide existing-home sales shrunk for the first quarter, but new-home sales grew enough to push overall sales into positive territory.

Active listings in the existing-home market plummeted, maintaining supply constraints. Active listings of new homes also fell during the first quarter. Houston led the boost in new-home sales with an average of 9,355 closed listings per month, expanding 9.7 percent QOQ. Austin and San Antonio increased marginally with 3,095 and 3,552 closed listings, respectively. New-home sales in DFW decelerated in 1Q2022 after a positive run that started last summer. They tumbled across all price cohorts except $500,000+ homes, most of which were in Dallas.

While the homeownership rate for the South was 67.4 percent, the U.S. Census Bureau announced the Texas homeownership rate ticked down 1.1 percentage points to 62.8 percent. Metro-level homeownership rates fell slightly except in San Antonio, where they rebounded 1.54 percent.

Texas’ average days on market (DOM) elevated to 33 days, demonstrating that, while the housing market is still hot, some signs of weakness are emerging. Austin’s DOM gained a day over the previous quarter, averaging 22 days in Q1, while homes sold after an average of 24 and 25 days in Dallas and Fort Worth, respectively. Houston’s metric gained 4.9 percent QOQ, staying above the state average at 35 days. San Antonio fell to 31.4 days. As supply has begun rising to meet demand, DOM has increased QOQ, signifying a slow return to a healthy market. 

The Federal Reserve is expected to reduce its balance sheet assets and increase the Federal Funds rate several more times by the end of the year. The ten-year U.S. Treasury bond yield2 rose from 1.5 percent last December to 2.1 percent this March, soaring by at least 60 basis points with much volatility along the way. Furthermore, the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate skyrocketed by 4.2 percent in March 2022, rising firmly from a record low of 2.7 percent in January 2021. Responding to these increased property interests, Texas’ home-refinance applications declined 10.8 percent in the past month, and the metric shrunk 54.8 percent from a year ago. Home-purchase applications, on the other hand, showed strong growth in 2022, albeit diminishing 8 percent from a year ago.

Millennials emerged as a big force of the mortgage applications as many reached 32 years old—the median age for first-time buyers. Though the increased mortgage rates could cool the homebuying frenzy and depress the housing boom, the need for larger family homes as well as for home office space persists, and housing demand remains robust. For a typical Texas mortgagee, the median mortgage rates in March climbed to 3.6 percent for non-GSE loans and 4.1 for GSE loans, respectively. The rates for both loans shot up by about 30 percent from a year ago. Under the pressure of rising interest rates, the original loan balance that constituted the “typical” Texas conventional home loan dropped $222 million in a year to $314 million. Despite the big drop in loan values, the debt-to-income ratio (DTI) rose from 35.3 to 35.6 percent, leaving housing affordability a long-lasting constraint.

Prices

Texas’ median home price rose for the 15th consecutive month, increasing 4.9 percent QOQ to a record-breaking $335,000 in March. The ongoing compositional sales shift toward higher-priced homes contributed to a higher median price. The growing share of higher-priced homes in Austin has increased the median price of homes sold to a new high of $520,000, up 8.9 percent QOQ. The Dallas metric ($416,000) gained 7.4 percent, while the quarterly price growth in Fort Worth ($352,000) elevated 5.9 percent. Houston’s ($330,000) and San Antonio’s ($322,000) metrics rose 4.8 and 4.1 percent, respectively.

The Texas Repeat Sales Home Price Index accounts for compositional price effects and corroborated substantial home-price appreciation as the index hovered near a series maximum, gaining 20 percent YOY. Austin led price growth with almost 30 percent YOY growth. Despite its elevated growth rate, the pace has gradually slowed closer to levels observed in the other major Texas metros. Annual home-price appreciation is at 28 and 25 percent in Dallas and Fort Worth, respectively. San Antonio posted a 20 percent annual hike followed by Houston with 15 percent growth. Rapid price growth outpaced wage gains, adding additional pressure to housing affordability.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, the share of Texas homeowners behind on their mortgage payments jumped 3 percentage points to 7 percent (Table 1). Houston areas mirrored the statewide average, where the behind-the-payment share increased 2 percent points, while DFW area was unchanged at 4 percent. The share of Texas respondents who were somewhat likely to leave their houses in the next two months due to foreclosure shrunk by 20 percent to 5 percent, much lower than the national rate of 13 percent (Table 2).

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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 (June 9, 2022)

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

Housing-Insight-February-2022-Summary

Texas Housing Insight February 2022 Summary

by Real Estate ArticlesResourcesStats

Texas’ housing market fell slightly in February as supply constraints continued pushing downward on the market, and mortgage rates increased. February sales and active listings were both down, resulting in an inventory level of about one month. Housing starts rose despite the continued surge in building material prices and dip in permits. The greatest challenge remains for homes in the lower price cohorts, as supply still has not caught up to the unprecedented demand. The state’s diverse and expanding economy, favorable business policies, and steady population growth, however, support a favorable outlook.

Supply1

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction activity, increased both nationally and within Texas as employment exceeded the pre-pandemic level, and construction values accelerated. The Texas Residential Construction Leading Index (RCLI) advanced, signaling an expected elevation in future activity. The most influential metric in the leading index was the rise in residential construction value among new construction starts.

Single-family construction permits contracted half a percent seasonally adjusted for February, lagging the national increase of 3.9 percent month over month (MOM). Austin and Dallas-Fort Worth permit activity fell 10.7 and 0.3 percent, respectively. Houston and San Antonio, on the other hand, increased 9.1 and 2.4 percent, respectively. Houston’s permit growth rate topped the national list, issuing 5,316 permits, while Dallas followed with 4,091.

Lumber prices rose 11.4 percent in a month and were up 78.3 percent year over year (YOY), drastically raising the costs associated with home building. Despite the lumber market disruption, robust economic conditions and copious demand pushed total Texas housing starts up for the fourth consecutive month, soaring 11.3 percent MOM. However, single-family private construction values subsided 0.7 percent MOM. Austin accounted for the majority of the loss with a 23.4 percent dip from the previous month, while San Antonio had a 0.1 percent decrease. Dallas-Fort Worth was unchanged, and Houston posted an 8.3 percent hike.

Texas’ months of inventory (MOI) remained one-month in February while the U.S. had 2.5 months of inventory for the same period, accentuating how intense housing demand is in Texas. Supply continued to be an issue across all price categories but especially for homes in the lowest price range. Total housing inventory is still tight in Texas’ four biggest metros. Both Austin and DFW remained below one month while Houston and San Antonio were slightly above.

Demand

Texas home sales were down from January, ending February slightly above 28,000. Sales fell in each of the four major Texas metros except San Antonio, where sales grew by almost 1 percent. February sales were negatively impacted by rising mortgage rates and higher home prices that continue to shut out some potential homebuyers.

The Federal Reserve is expected to reduce its balance sheet assets and increase the Federal Funds rate at least two to four times in 2022. The ten-year U.S. Treasury bond yield rose to 1.8 percent2, up 0.3 percent from the previous month. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate hovered around 3.5 percent, rising 0.4 percent over the previous month. The median mortgage rate for the typical Texas homebuyer climbed to 3.5 percent for government sponsored enterprise (GSE) loans in January3 and to 3.2 percent for non-GSE loans. February home-purchase applications inched up by 3.1 percent year to date (YTD), while refinance activities declined by 23.4 percent. (For more information, see Finding a Representative Interest Rate for the Typical Texas Mortgagee). 

In January, the median loan-to-value (LTV) constituting the “typical” Texas conventional-loan mortgage dropped from 87.7 a year ago to 83.8. The debt-to-income ratio (DTI) stayed unchanged from a year ago at 36.4 YOY, while the median credit score increased 8.7 points to 752.8 over the same period. The LTV for GSE borrowers stayed constant from December through January at 85.5; meanwhile, their DTI increased slightly from 36.8 to 37.3.

Prices

Texas’ median home price continued to increase, consistently growing since the start of the pandemic. Austin remains at the top with half the homes selling for almost $500,000. DFW is a distant second with a median home price around $375,000. Median prices for both Houston and San Antonio hovered slightly above $300,000.

The Texas Repeat Sales Home Price Index accounts for compositional price effects and provides a better measure of changes in single-family home values. The Texas index has risen 31.7 percent since the pandemic started. Texas home prices were up 1.24 percent MOM, escalating for the 21st consecutive month. While growth in all other metros accelerated at a steady pace, Austin’s explosive growth has slowed since last summer. In summary, Texas’ overall increasing home prices decreased its affordability advantage over states like California.

At the metropolitan level, Austin’s repeat sales home price index value surpassed all other metros with 29.1 percent YOY growth. Corroborating with the growth rate of median prices, Dallas followed with a 28 percent YOY expansion. Fort Worth and San Antonio’s indexes rose 23.3 and 19.7 percent, respectively. Houston followed with a 16.9 percent gain.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, the share of homeowners unable to make next month’s mortgage payment increased on a state level. Over 8.6 percent were “not at all confident” or only “slightly confident” they’d be able to make payments. The national average was just over 7.1 percent (Table 1). The number of Texas mortgage owners facing foreclosure increased (Table 2). However, the share of respondents who reported themselves as “not likely at all” to lose their house due to foreclosure also increased, inching up 1 percent to 43 percent. This is marginally above the national average of 42.9 percent (Table 2).

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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.
3 The release of Texas mortgage rate data typically lags the Texas Housing Insight by one month.

Source – Joshua Roberson, Weiling Yan, and John Shaunfield (May 31, 2022)

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

April 2022 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStatsVideo

April stats are here and we have the numbers! 

The housing market in North Texas continues to be hot! New listings are up consistently in all five counties over March 2022 as the Spring market continues to heat up. Despite higher mortgage rates, demand remains strong in North Texas. Average sales prices are up ranging from 16% in Dallas County to 35% in Rockwall County compared to April 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-January-2022-Summary

Texas Housing Insight January 2022 Summary

by Real Estate ArticlesResourcesStats

Texas housing sales continued to rise in January, compounding gains despite ongoing supply constraints. The months of inventory (MOI) slid to 1.4 months, putting downward pressure on the market. Single-family permits, however, increased, and housing starts continued to rise despite steep price hikes in lumber and other building inputs. Finding homes priced below $300,000 remained a great challenge to many Texans as inventory cannot keep up with booming demand. Sales have remained strong despite ongoing inventory limitations, particularly among lower priced cohorts. The state’s diverse and expanding economy, favorable business policies, and steady population growth still support a favorable outlook.

Supply1

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction activity, decreased nationally and in Texas due to falling employment outweighing heightened construction gains. The Texas Residential Construction Leading Index (RCLI) possibly reached a trough, signaling an increase in future activity. The downward trend was reverted by an increase in weighted building permits and residential construction value starts along with the ten-year real Treasury bill continuing to fall. The leading indexes among the major metros, however, continued to decline. Current inflationary conditions due to supply chain issues are putting downward pressure on construction activity and may impede construction activity in the coming months.

Single-family construction permits surged 7.1 percent, beating out the national increase of 6.5 percent month over month (MOM). Houston and Dallas-Fort Worth (DFW) remained on top of the national list and outnumbered Phoenix by approximately 1,000 permits. The largest rate of change of the major Texas metros came from San Antonio and DFW at 10 percent and 7.1 percent, respectively. Houston issued the highest number of permits at 4,837, marking a 2.2 percent uptick, while Austin issued 2,295 permits for a rise of 6.4 percent. Texas multifamily permits dropped 15.5 percent MOM; however, the metric was up 4.3 percent year to date (YTD).

Lumber prices soared 61.2 percent, drastically increasing the cost of home building. Despite the lumber market disruption, robust economic conditions and copious demand pushed total Texas housing starts up for the third consecutive month, increasing at 2.1 percent. Single-family private construction values also increased in real terms. Austin and Houston values ticked up 4 and 3 percent MOM, respectively, contributing to the majority of the 2 percent uptick in statewide values. Dallas and San Antonio posted negative numbers at 1 and 3 percent, respectively.

Texas’ months of inventory (MOI) fell to 1.4 months as active listings remained retracted while demand stayed high. A total MOI around six months is typically considered a balanced housing market. Supply remained severely limited, dropping across all price categories but most notably for homes in the lowest price range. The inventory for homes priced $200,000-$299,999 dropped to 0.94 months, and the lowest cohort (homes price less than $200,000) dropped 0.1 to 1.34 months. Total housing inventory in the major metros dropped significantly with the MOI remaining most constrained in Austin at 0.4 months. The metric in North Texas fell to 0.7 and 1.0 months in Dallas and Fort Worth, respectively. Houston’s MOI stayed steady at 1.6 months, while San Antonio declined to 1.5 months. Dwindling inventory persisted as a major headwind to the health of Texas’ housing market.

Demand

Monthly housing sales reached an all-time high for January in Texas with 38,900 closed listings in January. Total housing sales started off strong in 2022 with a 9.5 percent MOM increase, and the gains occurred across all price cohorts. The greatest increase was the $400,000-$499,999 cohort at 24 percent, while the lowest cohort rose only 4.7 percent by comparison. Houses in cohorts priced above $300,000 nearly doubled the percent gains in sales compared with those priced in the lowest two categories.

Housing sales increased across all major metros, led by Houston at 20.6 percent MOM. San Antonio followed with a hike of 8.7 percent. Meanwhile, Dallas and Austin experienced a 5.2 and 5.0 percent sales increase, respectively.

Texas’ average days on market (DOM) rose marginally to 33 days, increasing 0.5 percent MOM. The state DOM started rebounding since hitting a historical low of 29 days in August 2021, and it had continued rising for five consecutive months. Despite the marginal improvement in the buyers’ market, Austin remained the hottest housing market with an average DOM of 23 days. Dallas and Fort Worth’s DOM remained steady at an average of 26 days. DOMs for Houston and San Antonio were slightly higher than the state average, both at 34 days.

Market expectations are for the Federal Reserve to accelerate the tapering of assets purchases and to increase the Federal Funds rate in 2022 in an effort to combat rising inflation. The ten-year U.S. Treasury bond yield rose to 1.8 percent2, up 30 basis points from the previous month. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate hovered around 3.1 percent for the third consecutive month. The median mortgage rate for the typical Texas homebuyer climbed to 3.3 percent for GSE loans in December3 and rose to 3.1 percent for non-GSE loans. Refinance applications have declined on a monthly basis and were down 37.5 percent year over year (YOY). MOM purchase and refinance applications diminished 12.4 and 13.6 percent, respectively. (For more information, see Finding a Representative Interest Rate for the Typical Texas Mortgagee). 

In December, the median loan-to-value ratio (LTV) constituting the “typical” Texas conventional-loan mortgage dropped from 86.7 a year ago to 83.5. The debt-to-income ratio (DTI) declined from 35.8 to 35.3 YOY, while the median credit score increased 4.8 points to 753 over the same period. The LTV for GSE borrowers dipped slightly from 85.3 in November to 84.9; meanwhile, their DTI also dropped slightly from 36.6 to 36.3.

Prices

The ongoing shift in the composition of sales and price effects boosted the average and median home price. The Texas median home price rose for the 14th consecutive month, appreciating 1.9 percent on a monthly basis and 16 percent YOY to a record-breaking $376,363. The five major metros all hit historically high median prices. Austin led the pack with a median home price of $518,390 increasing 3.3 percent MOM. Dallas followed suit rising 2.7 percent to reach a median price of $408,572. The Houston metric ($325,077) and Fort Worth metric ($339,679) increased 2.5 percent and 1.8 percent, respectively, while the San Antonio metric ($308,279) gained a modest 0.7 percent.

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 January 2021’s 8.9 percent YOY increase, Texas’ index corroborated significant home-price appreciation, accelerating 19.6 percent YOY in 2022. The repeat sales index accelerated in all major metros for 14 consecutive months. The metric grew most rapidly in Austin with a 33.7 percent YOY increase. San Antonio posted a 19.9 percent annual hike, where Houston reported a similar climb of 16.5 percent. Prices in North Texas increased 26.2 and 23.8 percent in Dallas and Fort Worth, respectively. Increasing home prices pressured housing affordability, decreasing Texas’ affordability advantage over other states like California.

Single-Family Forecast

The Texas Real Estate Research Center projected single-family housing sales using monthly pending listings from the preceding period (Table 1). Texas sales reached a recent peak in December 2021, and the values have since declined. In February, Texas sales are expected to fall 2.7 percent. Likewise, the metric is estimated to dip 0.5 percent in Houston. Transactions in San Antonio are forecasted to plummet 3.2 percent. Austin and DFW are expected to see significant losses of 4.1 percent and 4.2 percent, respectively. Despite the monthly declines, sales from January to February 2022 should accelerate relative to the same period in 2021, with Houston anticipating a cumulative growth of 11.1 percent.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, the share of homeowners behind on mortgage payments balanced on the national level, and the share stepped up at the state level (Table 2). Meanwhile, for these mortgage owners, fewer of them needed to face the possibility of leaving due to foreclosure in Texas. The share of Texas respondents who reported themselves in the “not likely at all” group for leaving their house due to foreclosure jumped 15 percent, while the share reporting “somewhat likely” plummeted 9 percent (Table 3). In Houston, while the delinquent homeowners due to foreclosure remained high, more than half of the “not very likely” group predicted themselves as “not likely at all” to leave their house due to financial difficulties.

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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.
3 The release of Texas mortgage rate data typically lags the Texas Housing Insight by one month.

Source – Joshua Roberson, Weiling Yan, and John Shaunfield (May 3, 2022)

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

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March 2022 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStatsVideo

March stats are here and we have the numbers! 

The Spring selling season is underway, and the market reflects that with new listings up in all five counties, though they are just slightly down from March 2021. The average days on market continues to drop each month and averages 21 days in Collin, Dallas, Denton, Rockwall, and Tarrant Counties. While the prices for single family homes continues to climb to staggering highs; with the highest average being Collin County, coming in at over $600k, up from $462k in 2021, and $386k in 2020. WOW! (please note that March 2022 is the first month of the NTREIS reporting area change, so the data with MLS area information is no longer available for reporting. For more information on the change, visit here: https://www.republictitle.com/ntreis-…)

Our stats infographics include a year over year comparison and area highlights for single family homes and condos broken down by MLS area. 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 MLS area and condo stats, 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-2021-Annual-Summary

Texas Housing Insight 2021 Annual Summary

by Real Estate ArticlesResourcesStats

The Texas housing market was strong for most of 2021 as mortgage interest rates remained low throughout the year. Sales accelerated, and the average home price increased. Demand remained robust as households desired additional space and better neighborhoods. On the other hand, while new listings increased in 2021, the pace wasn’t enough to keep up with demand, particularly for listings in the lower price cohorts. Housing starts increased drastically in the first half of the year but slowed during the second half due to stubborn supply chain issues and mounting backlogs. In a strenuous and uncertain economy, the housing market was defined by shrinking supply and strong demand, putting upward pressure on the housing market, increasing home prices across the state.

Many of the same factors that defined the 2021 housing market will carry over into the new year, namely constrained inventory, which should maintain elevated price levels despite a slowdown in price growth. Nevertheless, Texas Real Estate Research Center economists expect single-family sales to increase 6.2 percent in January 2022. New variants of the virus present ongoing challenges and uncertainty, but the economic and housing outlook has remained positive. Rising mortgage rates will likely slow sales, but an increasing population and limited inventories should sustain home prices for the foreseeable future.

Supply*

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction activity, increased nationally and within Texas due to strong demand for housing. The Texas Residential Construction Leading Index (RCLI) reached a peak in April with an increase in weighted building permits and residential construction value starts combined with declines in the ten-year real Treasury bill. The trend, however, reverted downward at both the state and major-metropolitan levels, indicating slower activity in the beginning of 2022. Supply-chain issues weighed on construction activity and remain a significant challenge in coming months.

In response to supply shortages and despite the challenges of COVID-19, developers accelerated activity at the earliest stage of the construction cycle. According to Zonda, the number of new vacant developed lots (VDLs) in the Texas Urban Triangle, which encompasses the state’s major Metropolitan Statistical Areas (MSAs), elevated 8.2 percent annually in 2021 to 126,000. Austin led the state with an 18.2 percent increase over the previous year, and Dallas-Fort Worth (DFW) followed with a rise of 13.1 percent. San Antonio VDLs rose 7.9 percent, while the Houston metric increased incrementally by 1.9 percent. While these efforts should ease pressure on the overall housing market, it will take a much larger response to raise supply to meet the demand. 

Strong lot development was matched by a record 173,000 single-family housing construction permits issued in Texas. The statewide metric rose 11.2 percent over the previous year despite soaring lumber and input costs resulting from global supply constraints. Houston and Dallas topped the charts for the year, issuing over 52,100 and 48,400 permits, respectively. Austin and San Antonio both saw strong gains, issuing 24,356 and 13,862 permits, respectively.

Total Texas housing starts began the year with strong growth; however, the pandemic disrupted typical seasonal trends with permit issuance. Lumber prices were elevated in early 2021 and skyrocketed in May. Though prices dropped off somewhat by August, they ended the year 18.6 percent higher than 2020. Regardless, per Zonda, single-family starts in the urban triangle rose 21.2 percent over 2020 due to huge increases for homes slated to sell for $300,000 or more. Starts of homes priced at more than $500,000 surged 94.7 percent over the year. Starts at the low end of the price spectrum ($200,000 and less) decreased 71.9 percent. Limited supply in the lower price cohorts shifted the contribution of sales more toward the higher-priced categories. Construction focused more on high-end homes due to elevated material costs leaving less room for profit in lower-priced categories. All major metros saw double-digit increases in housing starts. San Antonio and DFW sustained strong growth with 29.6 and 28.3 percent increases, respectively, while Austin saw a 22.9 percent surge. Meanwhile, Houston posted a 12.6 percent increase, much lower than the other major metros.

Steady sales and depressed new Multiple Listing Service (MLS) listings pulled Texas’ total months of inventory (MOI) to an average of 1.6 across all price cohorts. A total MOI of around six months is considered a balanced housing market. Houses in the $200,000-$299,999 price cohort fell to one MOI throughout the year, dipping at its lowest to 0.8 MOI. Even homes priced above $500,000 dropped to 2.4 months compared with 2.9 months the previous year as constrained supply at the lower end of the price spectrum pushed buyers toward higher-priced homes. 

Demand

Texas reported 417,050 total housing sales through MLS in 2021, increasing over 6 percent annually. With the robust demand and constrained inventory in the lower price cohorts, more consumers competed for houses priced between $300,000 and $399,000. Sales in this price cohort reached an all-time high, jumping 40.02 percent annually, with the bulk of the increase a result of the second quarter. On the other hand, sales for luxury homes (priced more than $500,000) also broke the record, ascending at double-digits in percentage terms amid the expanded supply.

Houston led the urban triangle in home-sale growth at 11.8 percent. San Antonio and Austin followed with 4.6 percent and 2.5 percent sales growth, respectively. Contrary to the other metros, Dallas and Fort Worth sales balanced after reaching historical highs in 2021 as low inventories limited market activity.

The market share for metros in the Texas Urban Triangle shifted year to year. This percentage split shows how sales in one metro are growing or shrinking compared with other major state metros. In 2021, Houston had the biggest market change with a 2 percent YOY increase, up to 27 percent. The market loss was distributed to Dallas and Fort Worth, which decreased to 18 and 9 percent, respectively. Meanwhile, Austin and San Antonio remained stable at 10 percent market share.

According to the U.S. Census Bureau’s Current Population Survey/Housing Vacancy Survey, homeownership in Texas normalized to 64.2 percent over the year compared with the national rate of 65.5 percent. Homeownership rates decreased annually at the metropolitan level, but were still higher than 2019 values. The rates in Austin and DFW rolled back 3 percent, falling to 62.4 percent and 61.8 percent, respectively. Houston’s metric ticked down to 64.1 percent, while 62.7 percent of San Antonio’s total housing units were owner-occupied. The decreased rate may be because of rising cost of homes across the board coupled with scarce housing options in the lower price categories typically associated with starter homes, leading potential buyers to rent instead.

Amid record-breaking sales activity, Texas’ average days on market (DOM) dropped from 47 days in 2020 to 34 days in 2021. The sellers’ market was hottest in July when the DOM plummeted to 26 days. Corroborating robust housing demand, Dallas and Fort Worth’s DOM sank to 29 and 28 days, respectively. Austin remained the most demanded metro, with homes averaging just 25 days on the market. Demand grew stronger in San Antonio with a 12-day decrease in the DOM, converging with the state average. The Houston DOM remained above the state averagebut still fell to 37 days.

The Federal Reserve is expected to accelerate the tapering of assets purchases and increase the Federal Funds rate at least two to four times in 2022, reflecting rising interest rates. The ten-year U.S. Treasury bond yield ticked up 55 basis points in 2021, averaging 1.5 percent. Meanwhile, the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate fell to 3 percent. Notably, both bond and mortgage rates started rebounding after August, counterbalancing the inflation surge. Mortgage rates for conventional mortgages plummeted below 3 percent within Texas, highlighting a year of unprecedented low levels. Mortgage rates plunged to 3 percent for non-government-sponsored-enterprise (GSE) loans while the median mortgage rate for GSE borrowers diminished to 3.2 percent (GSEs include Fannie Mae and Freddie Mac). Mortgage application counts declined drastically in 2021. During that period, the number of refinance applications shrank 27.1 percent SAAR, while purchase applications shrank by 12.6 percent. Amid the reduced mortgage rate and bolstered home prices, average loan sizes decreased 2.6 percent for refinance applications, and the sizes increased 15.3 percent for purchase applications. (For more information, see Finding a Representative Interest Rate for the Typical Texas Mortgagee.)

Tightened lending standards continued with the strong housing demand. The debt-to-income ratio (DTI) constituting the “typical” Texas non-GSE mortgage decreased to 35.9 in 2021. Relief actions taken by the federal government and lenders helped some households pay off debt and save money. This helped push borrowers’ median credit score to a multidecade high of 749 The median loan-to-value ratio (LTV) dipped to 85.3 percent for non-GSE borrowers, leaving borrowers with a maximized loan value that’s 2.2 percent less with the same home equity value, while the GSE metric flattened at 85.4. The DTI for GSE borrowers, on the other hand, ticked up, inching up from 35.6 to 36.

Prices

Texas’ median home price rose for ten consecutive months, reaching a record-breaking $300,000 and appreciating at an astonishing rate of 15.6 percent annually. All five major metros all hit record-high median prices in the last months. The ongoing shift in the composition of sales toward higher-priced homes due to constrained inventories at the lower end of the market boosted the average and median home price. The share of luxury homes sold in Austin surged, pushing the median price ($450,000) by a notable growth of 30.8 percent YOY. The Dallas metric ($365,000) increased 17.4 percent, while annual price growth in Fort Worth ($309,000) shot up to 18.8 percent. Houston’s ($300,000) and San Antonio’s ($284,900) metrics increased to 15.4 and 14.4 percent, respectively.

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 December 2020’s 8.3 percent YOY increase. Texas’ index corroborated significant home-price appreciation, accelerating 19.5 percent YOY in 2021. The rate of growth surpassed the surge in the median home price. The repeat sales index also accelerated in all of the major metros. Austin stood above the rest, posting a 34 percent increase YOY. DFW and San Antonio saw their index rise 18.4 and 15.4 percent, respectively. Meanwhile, Houston had the lowest gains but a still strong 12.4 percent. Increasing home prices pressured housing affordability, decreasing Texas affordability advantage compared with past years.

Single-Family Forecast

Texas sales in January 2022 are expected to increase 6.2 percent over December 2021 (Table 1). On the metropolitan level, transactions are expected to drop across the board, but San Antonio is expected to decline the most. Except for Dallas, year-end home sales were greater in 2021 than in 2020.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, the share of homeowners behind on mortgage payments shrank both at the national and state levels compared with year-ago numbers (Table 2). Remarkably, the portion of Texas homeowners free and clear of a mortgage rose 2.9 percent, corroborating the effect of reduced mortgage rates and a recovered economy. Likewise, homeowners claiming the risk of foreclosure as “not likely” increased significantly from 8.5 percent to 27.5 percent. The proportion of delinquent individuals at risk of foreclosure in the state fell to only 0.3 percent. The Federal Housing Finance Agency’s foreclosure and REO eviction moratoria for properties owned by Fannie Mae and Freddie Mac (the Enterprises) expired Sept. 30, 2021. Continuing the stability and current trend in reducing delinquent homeowners’ mortgage payments is essential to Texas’ economic recovery.

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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, Wesley Miller, Weiling Yan, and John Shaunfield (Apr 6, 2022)

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

Blog Graphic

February 2022 DFW Area Real Estate Stats

by Real Estate ArticlesResourcesStatsVideo

February stats are here and we have the numbers! 

Our stats infographics include a year over year comparison and area highlights for single family homes and condos broken down by MLS area. 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 MLS area and condo stats, 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.