The Texas housing market is certainly a fascinating one to explore in 2022. Using several statistics, we explore the 2022 Texas houisng market and where it's heading. The lack of inventory continues to inflate Texas housing prices for now, but many analysts predict that the rate of appreciation will slow down as compared to the last two years. Some of the fastest-growing real estate markets in 2022 are in extremely desirable sections of Texas, particularly in the suburbs of major metropolitan cities.
These communities often have great educational systems and provide more value for money. They are ideal for millennials seeking a place to raise a family. The suburbs of Dallas and Austin are by far the most popular areas to purchase in Texas. Real estate brokers also report increased sales of lake properties and ranches as individuals seek ways to get away from congested cities.
Texas has approximately 1,700 cities with populations ranging from 2.3 million to less than 100 people. According to PwC and the Urban Land Institute's Emerging Trends in Real Estate 2022 research, Texas has four of the top twelve markets with the highest house-building prospects.
According to Zillow, the typical value of a mid-priced property in Texas has climbed by 24.7% through May 2022. It stands at $308,628 (ZHVI), which is $69,628 more than last May. People from all over the country are flocking to Texas to live, work, and invest in the Texas real estate market.
- Texas housing price 1-year change: 24.7%
- Texas housing price 5-year change: 63.2%
The FHFA House Price Index (FHFA HPI®) is the nation’s only collection of public, freely available house price indexes that measure changes in single-family home values based on data from all 50 states and over 400 American cities that extend back to the mid-1970s. At the national level, house prices rose 18.8 percent from April 2021 to April 2022. The previously reported 1.5 percent price change for March 2022 was revised upward to 1.6 percent.
Four-Quarter Appreciation in Texas (as of 2022 Q1)
- One-Quarter Appreciation: 4.5%
- Four-Quarter Appreciation: 19.8%
Texas Housing Market Predictions 2022 & 2023
Texas has had some of the strongest housing appreciation rates in the country over the past decade. Over the past decade, Texas housing prices have risen 99.56 percent, which equates to an annual home appreciation rate of 7.15 percent, according to the data collected by NeighborhoodScout. If you are a house buyer or real estate investor, Texas has been one of the finest long-term real estate investments in the United States over the past decade.
The Texas housing market is expected to grow in 2023. In other words, if you're debating whether or not to purchase a house this year, you can't start preparing now to be a better buyer in 2023. Texas housing market mirrors larger national trends, albeit with some regional variation. An imbalance between demand and supply has fueled rapid home appreciation across the state.
The real estate appreciation rate in the Lone Star State in the last two years has been 26.84%. Considering only the most recent twelve months, Texas appreciation rates continue to be among the highest in the United States, at 19.95% percent. The most recent quarter's appreciation rates in Texas were 4.10 percent, which amounts to an annual appreciation rate of 17.44 percent.
Although house sales have slowed in Texas, this is not always an indication of demand but rather of supply. Numerous analysts believe that the number of homes sold in Texas in 2021 could have been higher if there had been a greater supply of homes for sale. As newly constructed homes enter the market, this might result in an increase in overall sales.
If you want to sell your property in 2022, you are in an advantageous position. While Texas home prices are not predicted to increase as quickly or as sharply as they did in 2021, buyer demand remains robust and is unlikely to diminish. As Bidding wars are typical, your home is likely to attract a large number of buyers. This is a perfect moment to sell if you are not concerned about acquiring a new house with potentially higher interest rates.
After two years of the pandemic, analysts continue to forecast a surge in home sales. Unfortunately, this means that a large number of individuals will be priced out. Affordability will be a concern, and this might eventually lead to a decline in demand to more sustainable levels. Overall, the Texas housing market will likely continue robust, although not to the same extent as in 2021.
Texas Housing Market Trends 2022 (Latest)
Homebuyers are reconsidering the value of home purchases due to record property prices and quickly rising mortgage rates. In April, the typical single-family house price in Texas surged to almost $350,000, and the national mortgage rate rose about 2% in a year, making home purchases difficult, particularly for first-time buyers, according to the most recent report from the Texas Real Estate Research Center at Texas A&M University.
Seasonally adjusted house sales have fallen for three months in a row since the high in January, with the weighted loss on properties worth less than $300,000 reflecting the halt of first-time buyers. Meanwhile, higher-priced properties saw a slight uptick in sales. The extremely low inventory levels remained. However, construction permit demand increased in April. Rising future supply and high borrowing costs are likely to curb home price rise and calm the frantic housing market.
Both Texas and U.S. Residential Construction Leading Index indicated construction activity is expected to strengthen in the coming months as weighted building permits and employment continue to elevate. In Texas, permits returned to a seasonally adjusted (SA) monthly pace of 16,000 units following a small fall in March. With 4,800 and 4,700 non-seasonally adjusted permits, respectively, Houston and Dallas topped the national list. Austin issued 2,100 permits, while San Antonio issued 1,400. Increased April permits in Texas' multifamily sector demonstrated strong growth in two-to-four units.
Texas Housing Supply
- As housing starts inched up, Texas' single-family construction values increased 2.7 percent month-over-month (MOM).
- However, they were down for the 11th month compared with year-ago values.
- New listings for existing and new construction expanded in April. New-home listings were up 7,200 SA compared with 2021's monthly average of 6,200 units.
- Total active listings had a 10.4 percent MOM hike, pulling Texas' months of inventory (MOI) up to 1.3 months.
- The rebound was most significant for homes priced between $500,000 and $749,999 with 0.3 months lengthened market time.
- Homes priced under $400,000 remained the most constrained with 1.2 months, and the expansion for this price cohort was moderate.
Texas Housing Prices
- Due to limited inventory at the lower end of the market, a change in the composition of sales toward higher-priced properties led to home-price appreciation.
- The Texas median house price has steadily risen since January 2021, reaching a new high of $349,000 in April, an increase of more than 25% since then.
- Austin ($530,000) and Dallas ($439,000) were the two most expensive metros in which to own a single-family home.
- The median prices in San Antonio ($325,000), Houston ($337,000), and Fort Worth ($370,000) advanced at a double-digit rate.
- Houston was the slowest at raising its housing price in terms of price per square foot since 2010.
Texas Housing Demand
- Seasonally adjusted total house sales peaked in January, with approximately 39,000 transactions in the state, according to the Multiple Listing Service (MLS).
- Since then, sales have been declining on a monthly basis.
- Total house sales declined to 34,000 closed listings in April.
- Price pressures caused a drop in sales in all major metropolitan areas.
- Houston recorded 9,500 sales in April, a 1,400 decrease from the previous month's record.
- Dallas came in second with 5,800 completed transactions.
- Austin, Fort Worth, and San Antonio each lost hundreds of house sales, hovering around 3,000.
- Sales of properties valued under $500,000 fell 6.2 percent, while sales of more costly homes grew by roughly 1 percent.
- The drop affected hard on residences priced under $300,000, and the market share for these homes fell from 50% in April 2021 to 35%.
According to Redfin, Texas home prices (statewide) were up 19.0% year-over-year in May. At the same time, the number of homes sold fell 3.9% and the number of homes for sale rose 5.2%.
- Median Sale Price = $389,100, +19.0% year-over-year
- # of Homes Sold = 31,135, -3.9% year-over-year
Top 5 Metros in Texas with the Fastest Growing Sales Price
Beaumont, Texas: In May 2022, Beaumont home prices were up 27.0% compared to last year, selling for a median price of $240K. The average homes sell for about 1% below the list price and go pending in around 27 days. Hot listing can sell for about 1% above list price and go pending in around 7 days.
Melissa, Texas: In May 2022, Melissa home prices were up 32.4% compared to last year, selling for a median price of $510K. On average, homes in Melissa sell after 13 days on the market compared to 13 days last year. There were 45 homes sold in May this year, up from 43 last year. The average homes sell for about 5% below the list price and go pending in around 15 days. Hot listing can sell for about 11% abovethe list price and go pending in around 10 days.
Anna, Texas: In May 2022, Anna home prices were up 39.0% compared to last year, selling for a median price of $417K. On average, homes in Anna sell after 12 days on the market compared to 17 days last year. There were 72 homes sold in May this year, up from 34 last year. The average homes sell for about 5% below the list price and go pending in around 12 days. Hot listing can sell for about 11% above the list price and go pending in around 7 days.
Cleburne, Texas: In May 2022, Cleburne home prices were up 7.3% compared to last year, selling for a median price of $250K. On average, homes in Cleburne sell after 13 days on the market compared to 19 days last year. There were 54 homes sold in May this year, down from 55 last year. The average homes sell for about 1% below the list price and go pending in around 14 days. Hot listing can sell for about 4% above the list price and go pending in around 10 days.
Northlake, Texas: In May 2022, Northlake home prices were up 35.4% compared to last year, selling for a median price of $555K. On average, homes in Northlake sell after 24 days on the market compared to 18 days last year. There were 33 homes sold in May this year, up from 28 last year. The average homes sell for about 2% below the list price and go pending in around 26 days. Hot listing can sell for about 6% above the list price and go pending in around 8 days.
Texas Employment Situation
Home sales are typically intimately related to the health of an economy and increase and decrease in tandem with economic activity. As economies decline, the money supply becomes more constrained. As it gets more difficult to obtain money, fewer house buyers enter the market. With fewer buyers accessible due to stricter credit criteria, inventories of houses rise or take longer to sell. Price decreases when there is more supply of a product and less demand for it.
Texas economy is booming. The employment-to-population ratio or the percentage of the Texas civilian noninstitutionalized population 16 years and older counted as employed, in May rose to 61.1 from 60.8 percent in the prior month. At 61.1 percent, Texas ranks 24th among state employment-to-population ratios in the nation. The employment-to-population ratio in Texas rose by 1.5 percentage points from a year earlier.
Texas added 74,200 net payroll jobs, or 0.6 percent, on a seasonally adjusted basis during May. In the prior month, Texas added 61,200 jobs. Over the past twelve months, Texas added 762,400 payroll jobs or 6.1 percent. Texas nonfarm payroll employment had increased in each of the past 12 months.
During May, Texas’s private sector added 74,800 jobs or approximately 0.7 percent. The private sector in Texas added 57,300 jobs in the prior month. Over the past twelve months, private-sector payrolls in Texas added 733,900, or 6.9 percent. Texas private-sector payroll employment has increased in each of the past 12 months.
- Texas added 74,200 net payroll jobs and the unemployment rate fell by 0.1 percentage point to 4.2 percent in May.
- Over the past twelve months, Texas added 762,400 payroll jobs and the unemployment rate fell by 1.7 percentage points from 5.9 percent.
- In May, Texas’s private sector added 74,800 net private payroll jobs and over the past twelve months, it added 733,900 private payroll jobs in the establishment survey.
- In the household survey, the number of unemployed fell by 12,474 on the net in May, and over the past year, employment rose by 554,023.
- Texas’s labor force participation rate rose to 63.7 percent in May from 63.6 percent. Since last year, the labor force participation rate rose by 0.3 percentage points.
Top 10 Places to Buy a House in Texas in 2022
According to Niche.com, these are the top 10 areas to buy a home based on home valuations, property taxes, home ownership rates, housing prices, and real estate trends. Ranking based on statistics from the United States Census Bureau, the FBI, and other sources. Cottonwood Creek South is the best place in Texas to buy a house in 2022.
- Cottonwood Creek South, a neighborhood in Richardson, TX
- Arapaho, a neighborhood in Richardson, TX
- Lakeside City, TX
- Fulshear, a town in Fort Bend County, TX
- Canyon Creek South, a neighborhood in Richardson, TX
- Heights Park, a neighborhood in Richardson, TX
- Shady Hollow, a suburb of Austin, TX
- Red Lick, Bowie County, TX
- Woodway, a suburb of Waco, TX
- Timberbrook, a neighborhood in Plano, TX
Top 10 Texas Cities Having Highest Real Estate Appreciation Rates Since 2000
According to Neighborhoodscout.com, these are the top ten cities in Texas that have the highest real estate appreciation since the year 2000.
- West Lake Hills
- Westworth Village
- Wickett
- Austin
- Monahans
- Granger
- Gustine
- Balmorhea
- Mico
- Garden City
References
- https://www.zillow.com/tx/home-values/
- https://www.redfin.com/state/Texas/housing-market
- https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight
- https://www.neighborhoodscout.com/tx/real-estate
- https://www.niche.com/places-to-live/search/best-places-to-buy-a-house/s/texas/
- https://www.fhfa.gov/DataTools/Tools/Pages/Four-Quarter-Heat-Map.aspx
- https://www.fhfa.gov/AboutUs/reportsplans/Pages/Fannie-Mae-Freddie-Mac-Reports.aspx
- https://www.jec.senate.gov/public/index.cfm/republicans/tx/
