The number of homes for sale in the Texas market is now above pre-pandemic levels and continues to rise, with experts warning that the Lone Star State may soon be facing a pricing correction.
Why It Matters
The Texas housing market boomed during the pandemic when an influx of out-of-state newcomers moved to the state chasing warmer weather, cheaper housing, lower taxes and a more affordable cost of living.
To match growing demand, the state began building new homes at a faster pace than any state in the U.S., accounting for 15 percent of all new-home construction permits in 2024. However, the end of the pandemic and employers’ calls for workers to return to the office have slowed down migration to the state, and high mortgage rates are dampening demand from potential buyers.
What To Know
Traditionally, inventory levels are relatively low in January and February before exploding in the following months in time for the spring homebuying season, the busiest time for the housing market.
In Texas, inventory levels have been rising fast in these usually slow months. In February, the number of active listings in the state was 105,867, as reported by the Federal Reserve Bank of St. Louis, up from 102,552 in January. It was the highest level for the month of February in the past 10 years.
Redfin data shows an even larger number, with a total of 151,335 homes for sale in February, up 16 percent compared to a year earlier. Overall, Texas had five months of supply that month, with a one-month increase year over year—what normally indicates a balanced market between sellers and buyers.
The increase in inventory is clearly tipping the Texas market in favor of buyers. According to Redfin, only 11.5 percent of homes sold above list price, down 1.1 percentage point compared to a year earlier. On the other hand, 28.2 percent of homes had their asking price slashed by sellers, up 2.2 percentage points year over year.
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https://www.newsweek.com/texas-could-face-imminent-housing-market-price-correction-2053410