AUSTIN – (Realty News Report) – The Texas housing market is expected to remain strong in the third quarter as low interest rates and tight inventory create an attractive environment for home sellers, according to a report from the Texas Realtors association.
“The housing market is one of the few sectors of the economy that has stayed resilient. Barring another shutdown, we expect it to perform reasonably well in Q3,” said Jim Gaines, chief economist for the Real Estate Center at Texas A&M University. “Inventory is tighter than last year, keeping prices elevated. In June we also saw increased buyer activity as many took advantage of unusually low interest rates.”
The average 30-year fixed-rate mortgage has fallen to about 3 percent, one of the lowest levels ever recorded by Freddie Mac.
The 2020-Q2 Texas Quarterly Housing Report released by Texas Realtors showed an overall decline in home sales of 9.9 percent in the second quarter. However, Houston and several other markets experienced a significant rebound in June as pent-up demand emerged and the market adapted to operating under COVID-19 protocols.
In June, Houston recorded 9,328 single-family sales — the best month on record — a 15.7 percent increase over June 2019, the Houston Association of Realtors reported.
Across Texas, home prices rose. Statewide, the median price increased 2.9 percent to $252,000 in the second quarter, according to Texas Realtors.
“Even though Texans entered Q2 facing COVID-19, the housing market held steady,” said Cindi Bulla, chair of Texas Realtors. “The second quarter of 2020 performed remarkably well compared to the same period in 2019, which was one of our strongest years. Governor Abbott’s early designation of real estate as an essential service allowed Texas Realtors to shift to virtual tools and implement carefully planned safety protocols for necessary in-person interactions, minimizing disruption to the sector.”
Housing inventory in Texas declined by 0.9 months to 3.0 months of supply. The Real Estate Center at Texas A&M University considers a balanced market to have between 6.0 and 6.5 months of inventory.
“It’s worth noting that closed sales are down only about 10 percent compared to Q2 2019,” Bulla said. “Pent-up demand has contributed to rising prices, although the pace of increases has slowed. There are solid reasons for optimism heading into Q3, but our primary challenge remains the shortage of affordable inventory.”
July 27, 2020 Realty News Report Copyright 2020
File: Texas Housing Market
Photo credit: Ralph Bivins, Realty News Report Copyright 2020
