The Texas housing market has been one of the best long-term real estate investments in the United States over the past decade. After a boom during the peak of the pandemic era, with bidding wars and huge price increases, it now seems that homes are staying on the market for longer. Realtor.com reported that prices have dropped in some metropolitan areas due to high mortgage interest rates, which have reduced the number of buyers who can qualify for a loan and the price of homes they can afford. Mike Dishberger, a townhome developer in Houston and incoming president of the Greater Houston Builders Association, said that this is because there are fewer buyers looking for homes.
After two years of a red-hot market, many sellers have reduced prices to try to attract buyers who face higher mortgage rates, inflated home prices and inflation. Because there are fewer buyers available due to stricter credit criteria, home inventories increase or take longer to sell. The Real Deal reported on signs that the situation was changing in the growing Texas housing market, from a doubling of inventory in Austin from May to June, until Houston home sellers reduced prices and the fall in home sales in North Texas. Lower-priced homes, an attractive market for first-time buyers and younger homes, sold less than higher-priced homes.
This decline in housing availability indicates a major advance after the abnormally low inventories of the past two years. As a result, Texas housing supply, which has been below two months of inventory (MOI), recovered to 2.2 MOI. This is the perfect time to sell if you're not worried about buying a new home with potentially higher interest rates. Realty Austin said that average sales prices tend to fall during the fall, and the company believes that rising interest rates will likely continue to cause home prices to fall.
Prices no longer rise like before, and some places even sell price cuts to attract buyers in a changing market.