The current median home sale price, $354,300 is declining at 1.1% YoY. Also, homes are sitting on the market for 42 days. All this indicates that Texas real estate market is slightly less competitive.
Additionally, only 28,542 homes were sold in June 2024, down from 33,182 in the previous year. Sellers are receiving fewer offers. Such inactivity in the market is mainly due to the recent NAR settlement. People are anxious about the selling prices and agents’ compensation.
The NAR settlement has removed the buyers’ agent compensation and many MLSs have followed the suit. It will probably reduce the home selling prices. As a result, buyers will have improved affordability along with low mortgage rates.
Here are some tips for you to sustain in the market:
- If You Are a Home Buyer: Currently, the high-inventory of 157K homes and the increase in home prices can benefit you. The low interest rates at 6.59%-6.60% are now in buyers’ favor. Also, in case of low housing demand and prices, you can request for seller concessions.
- If You Are a Home Seller: The correction in the home prices is long overdue. In the wake of NAR settlement, home prices may rise a little more. If you’re a seller, you can make more profits on home sale before prices potentially drop.
So, How Is the Real Estate Market in Texas?
Slow! The number of homes for sale decreased in June 2024 by 14.0% compared to 2023. Single-family homes for sale are down by 13.6% and condos are down by 29.7%.
- Median Days on Market: The median days on the market for homes for sale are 53 days, up by 16 days YoY. Homes spending more days on the market indicates less housing demand.
- Housing Inventory and Supply: If you’re a buyer, you have more inventory to choose from. Homes for sale grew by 23.3% YoY. Currently, there are 187K homes for sale in Texas. Also, the average months of supply are 5 months.
- Average Home Prices: The average median home price in Texas is $253,900. In 2024, experts predict the median sale price may decrease due to the increased inventory. Currently, the sale-to-list price ratio is at 97.8%, with a decline of 0.46 pt YoY.
- Home Sales: As per June 2024 data, home sales increased by 23.3% YoY! Only 777 homes were sold, down from 1,106 in June 2023.
- Average Rent Prices: Rental costs vary statewide. An average tenant in Houston pays $1,342, while the one living in Victoria pays $1,040. You should check the rent rates in your region.
Why Is Texas a Buyer’s Market Now?
Buyers have more housing inventory to explore. The additional housing supply can balance the market and keep the home prices in check. Let’s look at some more facts:
- More Days on the Market: The share of homes with more days on the market have increased. In metro cities like Houston, Victoria, and Texarkhana, homes spend an average of 50 to 70 days on the market.
- Low Housing Demand: The demand in Houston is low with only 1792 homes sold in June, down from 509 last year. Only 96 homes were sold in Sarasota, down by 37% from last year.
- More Homes Have Price Drops: 30.9% of homes had price drops in June compared to 26% last year. The growing rate of price drops suggest a shift toward buyers’ market.
- Low Mortgage Rates: Even the mortgage rates are at record low at around 6.50%-6.84%. So, you can take advantage of low mortgage rates and get pre approved for a mortgage now.
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Texas Housing Market Predictions 2024
Here are the predictions for Texas’s housing market in the remaining months of 2024 and 2025:
- Number of Home Buyers Will Increase: Higher inventory and homes staying for long in the market will bring home shoppers back to the market.
- Interest Rates are Expected to Drop: Mortgage rates hit 6.34% in July, 2024. NAR predicts the average interest rate will drop to 6.3% by the year end. It will attract more buyers to apply for the loans.
- New Home Constructions Will Shoot Up: 33.4% of single-family homes for sale in Q1 were newly built. Construction of homes has soared and builders are responding to homebuying demand in Texas. This is fueled by remote work and low mortgage rates.
- Home Prices Will Drop: Home prices are sluggish now and will gradually start to drop.
- iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021. But in 2022, they offered only 86% and around 70% in 2023. The slow market has affected iBuyers like Opendoor and Offerpad. They lost billions of dollars in Q3, 2023. Their continuous lowball offers to sellers will increase opportunities for individual buyers.
Bonus Predictions: Buyer Broker Commissions Will Be Zero!
In a shocking turn of events, the NAR settlement has reduced buyer agent’s fees to zero. Let’s understand it through some points:
- Buyer Agents Will be Affected: As per the NAR settlement buyer agent’s fees has been removed. Buyers may find it difficult to transact in the market without any agents. Buyer agents may probably obsolete.
- Seller Concession Will Increase: This might increase the number of offline sale transactions. Ig sellers don’t have to pay any commissions to the buyer agent, buyers may request them for the concessions. Also, builders have begun to offer huge concessions to attract buyers.
- Builders Will Compete More: New builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023!
- Sellers May offer Fees for Services: Sellers may offer at least 1%-2% fees to the buyer agents in to sell homes quickly. Increasing competition from builders may also cause sellers to pay extra fees to buyer agents.
Curious what the NAR lawsuit is about?
Check out our video to find out why NAR chose to settle and eliminate the buyer-broker compensation rule.
Is the Housing Market in Texas Going to Crash?
A housing market crash in Texas is unlikely. Texas home values have been up by about 0.2% over the past year. A positive trend is predicted for the next five years by the analysts.
The net household income inflow in Texas is $74,640 each year. And Texas’s zero income tax rate is a cherry on the top. Texas’s job market is also strong. The unemployment rate is only at 4.0%.
Additionally, the average cost of living in Texas is $45,114 compared to the national average of $61,334. So it is unlikely that Texas’s housing market would crash anytime soon.
If you are looking for a home in Texas’s beautiful places, find your dream house here.
2024: Is It a Buyer’s or Seller’s Market Now?
In the upcoming months of 2024, it’s expected to lean more in favor of buyers. Home prices are rising slowly, and the number of homes for sale (198K) has increased by 39.8% year over year. It offers buyers more options.
With mortgage rates around 6.34%, buyers have more purchasing power, and more homeowners are likely to list properties on the Texas MLS. The properties for sale in Texas will increase.
So, whether you are looking for a condo in Houston or a single-family primary home in Edinburgh, you will find your dream home in upcoming months.
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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.
Frequently Asked Questions About Texas Real Estate Market
When will the housing market crash in Texas?
Not for the next few years. Texas's housing market will not crash in 2024. Despite 2023's skyrocketing interest payments and soaring home prices, Texans have managed to keep the market afloat.
What are the real estate housing market 2024 predictions for Texas?
2024 will be a stellar market for Texans. Here's our 2024 forecast for Texas housing market are: (1) Home sellers will return to the market come Spring 2024. (2) Number of houses for sale will increase (3) Property prices in Texas will increase marginally (4) Mortgage rates will stabilize in the latter half of 2024 (5) iBuyers will buy homes for lower than their fair market value. (6) Buyer agent commissions will be negotiable!
Is it a good time to buy a house in Texas?
Yes! Currently, there are very few buyers in the market compared to the supply of homes in Texas. The soaring interest rates has kept buyers at bay, so you can avoid bidding wars. As the mortgage rate stabilizes in 2024, more buyers will return, so we'd recommend you to buy a house now. If mortgage payments burn a hole in your pocket, you can always refinance.
» Best Time to Buy a House in Texas: Find out the best time to buy a Texas property & plan your finances accordingly.
Are home prices dropping in Texas?
No, the property prices in Texas were up by 1.2% YOY in January 2024. However, you can still find some of the cheapest places to live in Texas. With a 45.5% rise in the past five years, exploring budget-friendly cities is crucial amid the current scarcity of available properties in TX.
