Home sales in Texas fell to the lowest level in seven years in 2023, as persistently high mortgage rates kept buyers out of the market even as prices dipped modestly compared to 2022, according to a recent report by Texas REALTORS.
Sales plunged by 11 percent last year, the report found, with a total of 327,921 sales—the lowest number since 2016. The drop happened despite homes in the state generally a bit cheaper (down 1.4 percent) than they had been the year before with a statewide median price of $335,100.
In the same year, there were a total of 89,005 active listings, up 35.6 percent from 2022. The properties spent an average 55 days on the market, 20 more than in 2022.
In eight metro areas in Texas, the median price of homes decreased, with the biggest drop (10.4 percent) in the Austin-Round Rock metropolitan statistical area or MSA. Despite the plunge in prices, the metro area still had the highest median price in Texas at $450,000.
In 17 metros analyzed by Texas REALTORS, home prices increased, though mostly modestly. The biggest climbs were in El Paso (7.6 percent) and McAllen-Edinburg-Mission (6.8 percent). Most other cities had less than a 5 percent change in median price, whether higher or lower.
But while the Texas housing market seems to be navigating troubled waters, Jef Conn, chairman of Texas REALTORS, said the situation is looking up this year, especially for homebuyers.
“While higher mortgage rates kept some buyers on the sidelines last year, that has led to a lot of pent-up demand,” Conn said in a press release accompanying the report. “Sales have picked up early this year, and this spring is shaping up to be an active market.”
Newsweek contacted Texas REALTORS for comment by email on Wednesday.
The price of homes in Texas skyrocketed during the COVID-19 pandemic years, when the U.S. housing market was booming amid relatively low mortgage rates, high demand and historically low inventory. While in some cities they’re still rising, although modestly, prices recently dropped in Texas thanks to the flooding of new listings on the market as the state has been building more new homes than almost any other in the country.
But it might take some time for homebuyers to take advantage of the lower prices. Many might still be discouraged from purchasing due to still-high mortgages, while others may struggle to face high property taxes and rising insurance premiums.
The cost of home insurance is rising in Texas due to the exacerbating risk of devastating extreme weather events posed by climate change, which experts say is posed to increase their frequency and severity. Texas homeowners paid on average $4,142 a year in 2023, $1,361 a year more than the national average, according to Insurance.com.
Property taxes remain high across the state despite a recent relief package passed by Governor Greg Abbott, with many residents telling Newsweek that they’re struggling to keep up with the cost.
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.