Texas 2019 home sales returning to ‘normal’
By David S. Jones, senior editor, Real Estate Center at Texas A&M University
Feb. 19, 2019/Release No.06-0219
COLLEGE STATION, Tex. (Real Estate Center) – Since 1991, Texas single-family housing sales increased an average of 4.6 percent per year. The story will be different in 2019. Researchers for the Real Estate Center at Texas A&M University project sales to increase about 1 percent this year.
Housing permits for new single-family residential units are expected to slow to a 2.1-percent increase from nearly 6 percent in 2018.
“Lot availability, labor shortages, higher interest rates, and the inability to build homes in the more affordable price ranges will constrain new-home construction,” said Center Chief Economist Dr. James Gaines.
The slowdown doesn’t surprise the researchers. They were expecting a return to “normal.”
“Housing demand showed signs of normalizing, particularly in North Texas, after a multiyear period of record increases,” said Gaines. “Projected population and job growth, however, suggest healthy demand for the duration of the current economic expansion. The recent pause in sales activity slowed home-price appreciation to a historically normal rate. Rising interest rates will hinder housing affordability statewide.”
The Texas housing market slowed in 2018 as sales rose 1.7 percent compared with 4.1 the previous year. The shortage of homes priced less than $300,000 combined with rising interest rates weighed on overall activity. Listing inventories inched forward but remained tight relative to demand.
For more information, see the Center’s 2019 Texas Housing & Economic Outlook.
Funded primarily by Texas real estate licensee fees, the Real Estate Center was created by the state legislature to meet the needs of many audiences, including the real estate industry, instructors, researchers, and the public. The Center is part of Mays Business School at Texas A&M University.