More Texas households own a home than ever. According to the latest Texas Housing Insight report from the Real Estate Center at Texas A&M University, the state’s homeownership rate hit a record 67.5 percent in June.
“Despite falling sales in April and May, Texas’ second quarter homeownership rate was the highest since record-keeping began in 1996. Texas now lags the national rate by only half a percent, the smallest in eight years,” said Center Chief Economist Dr. James Gaines.
“National homeownership rates were higher across all races, including minorities,” he said. “Among Texas metros, Austin had the greatest increase in homeownership, rising almost 6 percentage points to 65.3 percent.”
The report has more good news.
“The Center’s single-family housing sales projection suggests July numbers may show a complete recovery in single-family home sales,” said Gaines. “But continued improvement depends on the resurgence in contracted coronavirus cases and hospitalizations.”
Total June housing starts rebounded 27.9 percent, but a downward trend continues. Fewer than 26,000 single-family homes broke ground in the Urban Triangle (bounded by DFW-San Antonio-Houston) during the second quarter, a 4.3 percent decline.
Texas homes are selling at a record pace. A dwindling supply of active listings and a resurgence in home sales pulled Texas’ months of inventory down to an all-time low of 2.8 months. Inventories of homes for sale posted record lows of 1.6 and 2.6 months in Austin and San Antonio, respectively. Six months is considered a balanced market.
Approximately two months after the forced economic shutdown, Texas’ homes were on the market an average 64 days in June, slightly more than the previous month. Major metros recorded softer demand. Houston and San Antonio’s metrics exceeded the state average, rising above 64 and 65 days, respectively. The average home in North Texas sold after 59 days in Dallas and 51 days in Fort Worth. Austin was the exception, as the days-on-market decreased to 53 days compared with 57 days for June last year.
“Pent-up demand and record-low mortgage rates pushed total housing sales up 29.4 percent in June,” said Gaines. “Improvement, however, stemmed from a pickup in existing-home sales transactions as activity in the new-home market stalled after a year of solid growth.”
The state’s median home price jumped 3.9 percent to $249,100 in June after subdued growth to start the second quarter. Annual price appreciation accelerated 4.2 percent. Austin’s median price led the state at $324,700. The median price was $298,800 in Dallas and more than $250,000 in Fort Worth and Houston. San Antonio’s median home price increased to $240,800.
“Slower home-price growth and historically low interest rates increased housing affordability in Texas’ major metros during the second quarter,” said Gaines. “Houston and Fort Worth were the most affordable, with both indexes climbing to 1.8. That means a Texas family earning the median income could afford a home 80 percent more than the median sale price.”
Housing affordability in Austin and Dallas registered double-digit year-over-year gains, exceeding 1.7 and 1.6, respectively, with the former posting a five-year high. Meanwhile, San Antonio’s index rose steadily to 1.7.
“We expect July numbers will show a complete Texas rebound from the pandemic-induced shutdown,” said Gaines. “Texas single-family sales are estimated to increase 22 percent, while Houston should outshine the other metros with 25.2 percent growth.
“In Austin and Dallas, single-family sales are projected to bounce back 24.6 and 22.6 percent, respectively. San Antonio’s improvement is forecasted to be slightly lower than the state’s at 17.8 percent but still sizeable nonetheless.”
Aug. 12, 2020/Release No. 13-0820 from the Real Estate Center at Texas A&M University