Despite a slight decline in prices compared to 2022, Texas home sales will decline in 2023 as persistently high mortgage rates keep buyers out of the market, according to a recent report from Texas Realtors. It has fallen to its lowest level in seven years.
The number of homes sold fell 11% last year, with a total of 327,921 homes sold, the lowest number since 2016, according to the report. This decline occurred even though home prices in the state were overall slightly lower than a year ago (down 1.4%). The statewide median is $335,100.
In the same year, there were a total of 89,005 active listings, an increase of 35.6% compared to 2022. Properties were on the market for an average of 55 days, 20 days longer than in 2022.
Median home prices declined in Texas' eight metropolitan areas, with the Austin-Round Rock metropolitan statistical area (MSA) seeing the largest decline (10.4%). Despite the plunge in prices, the median price in the metro area was still the highest in Texas at $450,000.
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In the 17 metropolitan areas analyzed by Texas Realtors, home prices rose, although mostly slowly. The highest increases were in El Paso (7.6%) and McAllen-Edinburg-Mission (6.8%). In most other cities, the median price change, high or low, was less than 5%.
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But while the Texas housing market appears to be going through a rough patch, Jeff Conn, chairman of Texas Realtors, said things are looking up for homebuyers in particular this year.
“Inventory growth in most markets should provide buyers with more choice in 2024, but changes in mortgage rates will continue to influence buyers' real estate investment decisions. We are hopeful that interest rates will come down,” Conn said.in a statement to newsweek.
“Rising mortgage rates deterred some buyers from purchasing in 2023, but the overall median price of homes in Texas still increased by a modest 1.4% compared to 2022. The decline was limited, with median prices increasing slightly in most metropolitan areas.Real estate.''
Texas home prices soared during the years of the COVID-19 pandemic, when the U.S. housing market was booming amid relatively low mortgage rates, high demand and historically low inventory. Prices are still rising, albeit slowly, in some cities, but Texas is building more new homes than almost any other state in the country, and prices have fallen recently as new properties flooded the market. did.
But it may take time for homebuyers to take advantage of those low prices. Many people may still be deterred from purchasing due to high mortgage costs, while others may be struggling in the face of high property taxes and rising insurance premiums.
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Home insurance costs are rising in Texas as climate change exacerbates the risk of catastrophic extreme weather events, which experts say will become more frequent and severe in the future. It has said. According to Insurance.com, Texas homeowners paid an average of $4,142 per year in 2023, $1,361 per year more than the national average.
Despite the recent relief package passed by Gov. Greg Abbott, property taxes remain high across the state, and many residents say they're struggling. newsweek They say they are struggling to keep costs down.
Updated 3/14/24 6:03am ET: This article has been updated with comment from Jef Conn.
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