Texas Housing Market Slows Slightly in Q3

The Texas housing market slowed slightly following a strong summer sales season, according to the 2021 Third Quarter Texas Quarterly Housing Report recently released by Texas Realtors. The number of homes sold across the state declined 3.5 percent in the third quarter 2021 compared to the previous year. This is the first time quarterly homes sales in Texas have decreased year-over-year since the second quarter of 2020.

“The housing frenzy due to the pandemic has possibly peaked. Home prices and homes sales are beginning to slow. In addition, months of inventory and home listings have reached a trough and are now increasing,” says Luis Torres, research economist with the Texas Real Estate Research Center at Texas A&M University. “Still, for the remainder of 2021, the housing market will be characterized by strong demand with low inventories accompanied by strong price growth, albeit at a slower rate.”

While the total number of Texas homes sold dipped to 115,272, the median sales price of $310,000 represents a 16.9 percent increase compared to third quarter 2020. Of all homes sold in the third quarter, 29.5 percent were priced from $200,000 to $299,999, the highest share of sales among all price-class distributions.

Housing inventory in Texas decreased to 1.6 months in the third quarter, a decline from 2.3 months in third quarter 2020. According to the Texas Real Estate Research Center at Texas A&M University, a market balanced between supply and demand has between six and 6.5 months of inventory.