texas housing insight - texas a&m university · real estate center economists continuously...

TEXAS HOUSING INSIGHTLUIS B. TORRES

RESEARCH ECONOMISTJAMES P. GAINESCHIEF ECONOMIST WESLEY MILLER

RESEARCH ASSOCIATE

PAIGE SILVARESEARCH ASSOCIATE T E C H N I C A L R E P O R T

2 1 2 0N O V E M B E R 2 0 1 9 D ATA

About This Report ................................................................................................................................. 3

November 2019 Summary .................................................................................................................... 4

Supply .................................................................................................................................................... 7

Texas Residential Construction Index ................................................................................................ 7

Single-Family Housing Construction Permits ..................................................................................... 7

Texas Housing Construction Permits .................................................................................................. 8

Major Metros Single-Family Housing Construction Permits .............................................................. 8

Total Housing Starts Per Capita .......................................................................................................... 9

Total New Private Single-Family Construction Value ......................................................................... 9

Total Months of Inventory ............................................................................................................... 10

Texas Months of Inventory by Price Cohort ..................................................................................... 10

Texas Current Months of Inventory by Price Cohort ....................................................................... 11

Texas Existing and New Home Months of Inventory ....................................................................... 11

Major Metros Existing Home Months of Inventory ......................................................................... 12

Major Metros New Home Months of Inventory .............................................................................. 12

Demand ............................................................................................................................................... 13

Total Housing Sales........................................................................................................................... 13

Texas Total Housing Sales by Price Cohort ....................................................................................... 13

Major Metros Total Housing Sales ................................................................................................... 14

Texas Homes Days on Market .......................................................................................................... 14

Major Metros Existing Homes Days on Market ............................................................................... 15

Major Metros New Homes Days on Market .................................................................................... 15

Texas Home Days on Market by Price Cohort .................................................................................. 16

30-Year Mortgage Rate and 10-Year Treasury Yield ........................................................................ 16

Texas Mortgage Applications ........................................................................................................... 17

Prices ................................................................................................................................................... 18

United States Existing and New Home Median Sales Price ............................................................. 18

Texas Existing and New Home Median Sales Price .......................................................................... 18

Major Metros Existing Home Median Sales Price ............................................................................ 19

Major Metros New Home Median Sales Price ................................................................................. 19

Repeat Sales Home Price Index ........................................................................................................ 20

Texas Home Median Price Per Square Foot ..................................................................................... 20

2

Major Metros Existing Home Median Price Per Square Foot .......................................................... 21

Major Metros New Home Median Price Per Square Foot ............................................................... 21

Texas Home Sale Price to List Price .................................................................................................. 22

Major Metros Existing Home Sale Price to List Price ....................................................................... 22

Major Metros New Home Sale Price to List Price ............................................................................ 23

3

Real Estate Center economists continuously monitor many facets of the global, national, and Texas

economies. Texas Housing Insight is a summary of important economic indicators that help discern

trends in the Texas housing markets. All measurements are calculated using seasonally adjusted

data, and percentage changes are calculated month-over-month, unless stated otherwise.

This monthly publication provides data and insights on the Texas housing markets. We hope you

find them useful. Your feedback is always appreciated. Send comments and suggestions to

[email protected].

Dr. James Gaines, Dr. Luis Torres, Wesley Miller, and Paige Silva

Data current as of December 23, 2019

© 2019, Real Estate Center. All rights reserved.

mailto:[email protected]

4

Texas housing sales stabilized in November after reaching a record high the previous month. Steady

employment growth and low mortgage interest rates continued to support housing demand, as

exemplified by rising mortgage applications and a downtick in the average days on market. As

home builders continued to concentrate their efforts to provide more affordable homes, inventory

for homes priced less than $300,000 expanded for the first time since February. Additional supply

at the lower end of the market pushed Austin sales to record-breaking levels while also supporting

an increase in San Antonio’s sales volume. On the other hand, November home purchases in

Houston and North Texas fell due to low inventories in the same price range. Although home-price

appreciation has moderated over the past few years, housing affordability remains the primary

challenge to the Texas housing market.

Supply*

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction

activity, ticked up with industry wage improvements. The Residential Construction Leading Index

rose to its highest level since the Great Recession as housing starts increased, suggesting higher

levels of construction in the coming months.

Single-family construction permits fell for the first time in five months, but the year-to-date (YTD)

count increased 1.5 percent compared with January-through-November levels in 2018. Texas led

the nation with 9,128 nonseasonally adjusted permits, accounting for 16 percent of the U.S. total,

but ranked seventh in per capita issuance. On the metropolitan level, Houston topped the list for

the 13th straight month with 2,883 permits, followed by DFW with a post-recessionary record

2,789. Issuance remained strong in Central Texas with 1,259 and 736 permits in Austin and San

Antonio, respectively. Texas’ monthly multifamily permits stepped back from a YTD record in

October but maintained a strong upward trend.

Total Texas housing starts accelerated to a one-and-a-half year high, increasing 6.1 percent amid a

rebound in the multifamily sector. Single-family private construction values fell 8.7 percent after

data revisions pushed October values upward. November levels, however, were in line with the

* All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.

5

yearlong average. Houston and San Antonio registered monthly losses but maintained positive

momentum. Austin and DFW construction values increased after dropping in October.

Strong construction activity balanced solid sales volumes. Texas’ months of inventory (MOI)

remained at 3.6 months for the fifth consecutive month. A total MOI around six months is

considered a balanced housing market. The MOI for homes priced less than $300,000, which

comprised two-thirds of sales, ticked above 2.8 as the supply of active listings increased for the

third straight month. Inventory for luxury homes (those priced more than $500,000), however,

remained elevated at 8.3 months. This disparity exemplifies the shortage of affordable housing,

although efforts have been made to more closely match demand and supply.

Inventory continued to decrease in Austin and Dallas, sliding below 2.2 months in the former and

posting 3.1 months in the latter. The Fort Worth and Houston MOIs steadied at 2.5 and 3.9 months,

respectively. Meanwhile in San Antonio, a recent influx of new listings pushed the MOI to 3.7

months with a notable increase in the $200,000-$300,000 price cohort.

Demand

Total housing sales flattened in November after adjusting for seasonality. The upward trend,

however, persisted amid low interest rates and ongoing strength in the job market. Activity for

homes priced above $200,000 slowed after reaching record-breaking levels the previous month but

increased more than 10 percent compared with 2018 on a YTD basis.

Central Texas sales volumes continued to grow, particularly in Austin, where transactions climbed

3.2 percent for the fifth straight month. Most of the monthly improvement occurred in the

$200,000-$300,000 price range after weakness in the first half of the year. San Antonio sales rose 1

percent, largely due to a surge in closings for homes priced below $200,000. Houston and Fort

Worth, however, lost traction in the $200,000-$300,000 bracket, pulling total sales down 1.3 and

1.1 percent, respectively. Dallas sales activity declined 3.4 percent with decreases across all price

cohorts.

Texas’ average days on market (DOM) stabilized at 59 days, indicating healthy demand. The DOM

in Houston and San Antonio steadied at 56 and 59 days, respectively. In Austin, the DOM recorded

a monthly increase to 57 days but shed two days from a year ago. North Texas demand remained

strong compared to the rest of the state with DOMs of 51 and 45 days in Dallas and Fort Worth,

respectively.

Speculations of a U.S.-China trade truce and continued strength in the national economic data

slowed the downward slide in interest rates. Long-term rates were above those for short-term

instruments for the second straight month following a four-month yield curve inversion, signaling

increased confidence. Concerns of a recession lessened as current economic fundamentals at the

state and national level remain healthy and stable. The ten-year U.S. Treasury bond yield rose

above 1.8 percent, while the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate

stabilized at 3.7 percent. After falling the previous month, mortgage applications for home

6

purchases climbed nearly 30 percent YTD. Refinance mortgage application activity accelerated as

rates remained relatively low, almost tripling since year end.

Prices

The Texas median home price flattened at $245,300, while annual home-price appreciation

decelerated to 4.2 percent. The median price for new homes flattened; however, resale

transactions, which comprise the majority of home sales, recorded the fastest median price growth

rate this year of 5.5 percent year over year (YOY), exceeding the national existing-home price

appreciation of 5.4 percent YOY.

On the metropolitan level, median home prices fell. Austin’s median price dropped $14,600 from

an all-time high in October to $314,400. San Antonio’s metric shed $6,300, falling to $229,500 as

homes priced less than $200,000 comprised more than a third of total sales for the first time since

May. The median price in North Texas was $293,600 and $251,800 in Dallas and Fort Worth,

respectively. Houston’s price decreased for the second straight month to $245,100.

The Texas Repeat Sales Home Price Index indicated more moderate home price appreciation of 3.7

percent. The Dallas and Houston indices slowed pace, increasing only 2.1 and 2.0 percent YOY,

respectively. San Antonio’s index increased 4.1 percent YOY but decelerated from growth as high as

6.6 percent in January. On the other hand, Austin’s and Fort Worth’s indexes accelerated 5.5 and

4.3 percent YOY, respectively. Rising home prices without substantial wage growth decreases

overall housing affordability, which remains the primary challenge to the Texas home market.

7

Note: Trend-Cycle Component. Sources: Real Estate Center at Texas A&M University and Federal Reserve Bank of Dallas

Note: Trend-Cycle Component. Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University

60

80

100

120

140

160

180

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

TX Coincident Index US Coincident Index TX Leading Index

20

40

60

80

100

120

140

160

180

200

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

United States

Texas

Texas Residential Construction Index (Index Jan 2000 = 100)

Single-Family Housing Construction Permits (Index Jan 2000 = 100)

8

Note: Trend-Cycle Component. Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University

Note: Trend-Cycle Component. Fort Worth is missing data for Somervell County. Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University

0

25

50

75

100

125

150

175

200

225

250

275

300

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Single-Family Units 2-4 Family Units

5+ Family Units

20

60

100

140

180

220

260

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Austin-Round Rock

Dallas-Plano-Irving

Fort Worth-Arlington

Houston-The Woodlands-Sugar Land

San Antonio-New Braunfels

Texas Housing Construction Permits (Index Jan 2000 = 100)

Major Metros Single-Family Housing Construction Permits (Index Jan 2000 = 100)

9

Note: Trend-Cycle Component. Source: U.S. Census Bureau and Bank of Tokyo-Mitsubishi UFJ

Note: Inflation adjusted. Trend-Cycle Component. Source: Dodge Data & Analytics

20

40

60

80

100

120

140

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

United States

Texas

75

100

125

150

175

200

225

250

275

300

325

2011 2013 2015 2017 2019

Texas

Austin-Round Rock

Dallas-Fort Worth-Arlington



Total New Private Single-Family Construction Value

(Index Jan 2011 = 100)

Total Housing Starts Per Capita

(Index Jan 2000 = 100)

10

Note: Trend-Cycle Component. Months of inventory for the United States is estimated using weights for all existing homes and new single-family homes; new nonsingle-family homes are not included. Texas includes all existing and new homes. For more information, see Months of Inventory. Sources: U.S. Census Bureau, National Association of Realtors, and Real Estate Center at Texas A&M University

Note: Trend-Cycle Component. Source: Real Estate Center at Texas A&M University

3

4

5

6

7

8

9

10

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

United States

Texas

2

4

6

8

10

12

14

16

2011 2013 2015 2017 2019

$0-$199,999 $200,000-$299,999

$300,000-$399,999 $400,000-$499,999

$500,000+

Total Months of Inventory (Months)

Texas Months of Inventory by Price Cohort (Months)

https://assets.recenter.tamu.edu/Documents/Articles/2046-7.pdf

11

Note: Seasonally adjusted. Source: Real Estate Center at Texas A&M University

Texas Existing and New Home Months of Inventory (Months)


3.0 3.1

4.0

4.6

8.3

0

1

2

3

4

5

6

7

8

9

$0 - $200K $200K - $300K $300K - $400K $400K - $500K $500K+

3

4

5

6

7

8

9

2011 2013 2015 2017 2019

Existing Months of Inventory

New Months of Inventory

Texas Current Months of Inventory by Price Cohort (November 2019)

12

Major Metros Existing Home Months of Inventory (Months)



1

2

3

4

5

6

7

8

9

2011 2013 2015 2017 2019

Austin-Round Rock

Dallas-Plano-Irving




3.0

3.5

4.0

4.5

5.0

5.5

6.0

2011 2013 2015 2017 2019

Austin-Round Rock Dallas-Plano-Irving

Fort Worth-Arlington Houston-The Woodlands-Sugar Land


Major Metros New Home Months of Inventory (Months)

13

Note: Trend-Cycle Component. Sales for the United States include all existing homes and new single-family homes sold through an MLS; new non-single-family homes are not included. Texas includes all existing and new homes. For more information see Housing Sales. Sources: U.S. Census Bureau, National Association of Realtors, and Real Estate Center at Texas A&M University


60

80

100

120

140

160

180

200

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

United States Texas

50

100

150

200

250

300

350

400

450

500

2011 2013 2015 2017 2019

$0-$199,999 $200,000-$299,999

$300,000-$399,999 $400,000-$499,999

$500,000+

Total Housing Sales (Index Jan 2000 = 100)

Texas Total Housing Sales by Price Cohort (Index Jan 2011 = 100)

https://assets.recenter.tamu.edu/Documents/Articles/2046-5.pdf

14


Note: Trend-Cycle Component. For single-family homes. Source: Real Estate Center at Texas A&M University

75

100

125

150

175

200

225

250

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Austin-Round Rock

Dallas-Plano-Irving




45

55

65

75

85

95

105

115

2011 2013 2015 2017 2019

Existing Home Days on Market New Home Days on Market

Texas Homes Days on Market (Days)

Major Metros Total Housing Sales (Index Jan 2000 = 100)

15



25

35

45

55

65

75

85

95

105

2011 2013 2015 2017 2019

Austin-Round Rock

Dallas-Plano-Irving




60

70

80

90

100

110

120

2011 2013 2015 2017 2019




Major Metros Existing Homes Days on Market (Days)

Major Metros New Homes Days on Market (Days)

16


Note: Nonseasonally adjusted. Sources: Federal Home Loan Mortgage Corporation and Federal Reserve Board

40

50

60

70

80

90

100

110

120

130

2011 2013 2015 2017 2019

$0-$199,999 $200,000-$299,999

$300,000-$399,999 $400,000-$499,999

$500,000+

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2007 2009 2011 2013 2015 2017 2019

Mortgage Bond

30-Year Mortgage Rate and 10-Year Treasury Yield

(Percent)

Texas Home Days on Market by Price Cohort (Days)

17

Note: Seasonally adjusted. Source: Mortgage Bankers Association

-100

-50

0

50

100

150

200

2011 2013 2015 2017 2019

Refinance Purchase

Texas Mortgage Applications

(Year-over-Year Percentage Change)

18

Note: Trend-Cycle Component. For single-family homes. Source: Federal Reserve Bank of St. Louis


160,000

180,000

200,000

220,000

240,000

260,000

280,000

300,000

320,000

340,000

2011 2013 2015 2017 2019

Existing Home Median Sales Price

New Home Median Sales Price

130,000

150,000

170,000

190,000

210,000

230,000

250,000

270,000

290,000

310,000

2011 2013 2015 2017 2019

Existing Home Median Sale Price

New Home Median Sale Price

Texas Existing and New Home Median Sales Price ($)

United States Existing and New Home Median Sales Price ($)

19



120,000

150,000

180,000

210,000

240,000

270,000

300,000

330,000

360,000

2011 2013 2015 2017 2019

Austin-Round Rock

Dallas-Plano-Irving




170,000

200,000

230,000

260,000

290,000

320,000

350,000

380,000

2011 2013 2015 2017 2019

Austin-Round Rock

Dallas-Plano-Irving




Major Metros Existing Home Median Sales Price ($)

Major Metros New Home Median Sales Price ($)

20

Note: Seasonally adjusted. The Repeat Sales Home Price Index tracks real home price appreciation for residential single-family homes. Source: Real Estate Center at Texas A&M University


0

1

2

3

4

5

6

7

8

9

10

2014 2015 2016 2017 2018 2019Texas Austin-Round RockDallas-Plano-Irving Fort Worth-ArlingtonHouston-The Woodlands-Sugar Land San Antonio-New Braunfels

65

75

85

95

105

115

125

135

145

2011 2013 2015 2017 2019

Existing Home Median Price PSF

New Home Median Price PSF

Texas Home Median Price Per Square Foot ($)

Repeat Sales Home Price Index (Year-over-Year Percentage Change)

21



60

80

100

120

140

160

180

2011 2013 2015 2017 2019

Austin-Round Rock

Dallas-Plano-Irving




75

85

95

105

115

125

135

145

155

165

2011 2013 2015 2017 2019




Major Metros Existing Home Median Price Per Square Foot ($)

Major Metros New Home Median Price Per Square Foot ($)

22



0.90

0.91

0.92

0.93

0.94

0.95

0.96

0.97

0.98

2011 2013 2015 2017 2019

Existing Home Sale-to-List Price Ratio

New Home Sale-to-List Price Ratio

0.90

0.91

0.92

0.93

0.94

0.95

0.96

0.97

0.98

0.99

2011 2013 2015 2017 2019

Austin-Round Rock

Dallas-Plano-Irving




Major Metros Existing Home Sale Price to List Price (Ratio)

Texas Home Sale Price to List Price (Ratio)

23


0.91

0.92

0.93

0.94

0.95

0.96

0.97

0.98

0.99

2011 2013 2015 2017 2019

Austin-Round Rock

Dallas-Plano-Irving




Major Metros New Home Sale Price to List Price (Ratio)

i

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