Texas home sales and prices may be the only thing rising as fast as the summer temperatures in the Lone Star State. The housing market showed strong gains in the second quarter, according to the Texas Quarterly Housing Report released by the Texas Association of Realtors.
“The last few months have been one of the strongest starts to the summer selling season in the history of Texas real estate,” TAR chairman Leslie Rouda Smith said.
“Texas homes of all types and price classes are in high demand,” Smith said. “This is especially true for homes priced under $200,000, which are often preferred by first-time homebuyers but also in shortest supply across the state.”
The report shows that 91,418 homes were sold in Texas during the second quarter, a 4.4% increase from last year and the highest volume of Texas home sales ever.
Starter homes were popular during the second quarter, with homes under $200,000 making up 45% of the total share of homes sold. Another 47% of homes sold were prices between $200,000 and $500,000.
Home prices increased 7.5% annually to $215,000 due to strong population growth and low housing inventory, according to the report.
Housing inventory remained unchanged from the first quarter at 3.7 months, indicating a seller’s market. For the market to be balanced, inventory would need to rest at between six and 6.5 month’s supply, according to the Real Estate Center at Texas AM University.
“While some local markets are still being impacted by declines in the energy sector and housing affordability challenges, overall the Texas housing market continues to perform very well,” said Jim Gaines, chief economist at the Real Estate Center.
“Flattening declines in statewide housing inventory and an increasing number of homes on the market indicate that Texas could finally be moving towards a more balanced housing market, although it will take some time to do so,” Gaines said.
While inventory is still tight, active listings rose 4.1% from last year to 98,495 active listings. The market is still competitive, however, as homes are spending less time on the market. Homes average 54 days on the market in Texas, down one day from last year.
In the Dallas metro area during the second quarter, new home starts increased, but not in the affordable housing sector where it was most needed, according a recent report from Metrostudy.