AUSTIN – (Realty News Report) – The Texas housing market is expected to be strong in the third quarter as low interest rates and a tight inventory create an excellent home-selling climate, according to a report from the Texas Realtors association.
“The housing market is one of the few segments of the economy that has held strong. Barring another shutdown, we anticipate it to perform reasonably well in Q3,” said Jim Gaines, chief economist for the Real Estate Center at Texas A&M University. “We have a tighter market compared to last year, causing prices to remain high. However, in June we saw demand pick up with buyers becoming more active and taking advantage of the low interest rates.”
The average 30-year, fixed-rate mortgage has fallen to about 3 percent, the lowest rates ever recorded by Freddie Mac.
The 2020-Q2 Texas Quarterly Housing Report released by Texas Realtors, showed an overall decline in homes sales of 9.9 percent in the second quarter. However, Houston and other markets showed a huge surge in June, as pent-up demand emerged and the market adjusted to operating in the Covid-19 era.
In the month of June, Houston had 9,328 single-family sales – the best month on record and a 15.7 percent increase over June 2019, the Houston Association of Realtors reported.
Across Texas, home prices are up. Statewide, the median price increased 2.9 percent to $252,000 in the second quarter, the Texas Realtors reported.
“Even though Texans entered Q2 in the jaws of COVID-19, the housing market held its own,” said Cindi Bulla, chairman of Texas Realtors. “The second quarter of 2020 fared amazingly well by comparison to the same period of 2019, which was arguably one of our best years ever. Gov. Abbott’s early declaration of real estate as an essential service allowed Texas Realtors to transition to virtual platforms and carefully choreographed safety protocols for the few necessary in-person contacts, virtually eliminating disruption to the real estate sector.”
Housing inventory in Texas declined 0.9 months to 3.0 months of inventory. According to the Real Estate Center at Texas A&M University, a market balanced between supply and demand has between 6.0 and 6.5 months of inventory.
“It’s important to note that closed sales are off by only 10 percent compared to the second quarter of 2019,” Bulla said. “Pent up demand still resulted in rising prices, though at a slower pace. There is every reason for optimism as we move into Q3. However, our biggest problem remains the availability of affordable inventory.”
July 27, 2020 Realty News Report Copyright 2020
File: Texas Housing Market
Photo credit: Ralph Bivins, Realty News Report Copyright 2020