Texas’ housing market slowed in August after a surge of pent-up demand inflated sales numbers the previous month.
"Sales activity is no longer catching up from the economic shutdown that hindered the showing of homes and closings at the beginning of the spring buying season," said Real Estate Center Chief Economist Dr. James Gaines. "Existing homes sold through Texas Multiple Listing Services peaked in July as the economic consequences of the ongoing pandemic continued to develop."
Existing-home sales fell 14.6 percent from July but remained 3.4 percent higher than in August 2019.
"Low mortgage rates supported the year-over-year increase, but the effect of that stimulus may dwindle if persistent unemployment shrinks the number of qualified homebuyers," Gaines said.
According to the National Association of Realtors, existing-home sales at the national level increased for the third consecutive month on a seasonally adjusted basis and maintained double-digit year-over-year growth. They attribute the gains to robust demand but note rising supply-side constraints. Center Research Economist Dr. Luis Torres highlighted the supply-demand imbalances that will challenge the housing market over the next year.
"While sales surged during the summer, the number of new listings hitting the market has not matched that recovery, worsening the state's housing shortages, particularly for homes priced less than $300,000," said Torres. "This mismatch has pulled the months of inventory for homes priced less than $300,000 to record lows of fewer than 2.5 months."
Diverging trends across price ranges have led to increases in the median sale price for existing homes, which increased by more than 10 percent year over year for the second consecutive month, according to Center research.
Excerpted from Texas A&M Real Estate Center