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 being 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.
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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 rising inventory in most markets should offer buyers more options in 2024, fluctuations in mortgage rates continue to affect buyers' decisions to invest in real estate. We're hoping to see lower interest rates by the end of this year," Conn said in a statement to Newsweek.
"Higher mortgage rates deterred some buyers in 2023, but even so, the overall median price of homes in Texas saw only a slight decline, 1.4 percent, compared to 2022, with the majority of metro areas seeing slight median price increases. Real estate is very localized, so certain markets are experiencing very different trends than Texas as a whole is seeing. Realtors can help buyers make sense of the state of their specific market and guide them through the best decisions for their situation."
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 flood 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.
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The cost of home insurance is rising in Texas due to the worsening risk of devastating extreme weather events posed by climate change, which experts say are poised 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.
Update, 3/14/24 6:03 a.m. ET: This article was updated to include a comment from Jef Conn.
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Giulia Carbonaro is a Newsweek Reporter based in London, U.K. Her focus is on U.S. and European politics, global affairs ... Read more
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