The Texas housing market has been one of the hottest and most resilient in the nation, especially during the COVID-19 pandemic. The state has seen strong population growth, job growth, and demand for housing, while also facing supply shortages and rising home prices. But will this trend continue in 2024, or will the market crash?
Based on the housing predictions, it seems unlikely that the Texas housing market will crash in 2023 or 2024. However, there are no guarantees or certainties when it comes to real estate trends and fluctuations. The market could be affected by unforeseen events and circumstances that could change the outlook. Therefore, buyers and sellers should always do their own research and due diligence before making any decisions.
Will the Texas Housing Market Crash?
There are several factors that could influence the performance of the Texas housing market in 2024, both positively and negatively. Here are some of the most important ones:
- Interest rates: The Federal Reserve has started to raise interest rates to combat inflation, which has increased the cost of borrowing for home buyers. Higher interest rates could reduce the demand for housing, as well as make it harder for some buyers to qualify for mortgages. However, interest rates are still relatively low by historical standards, and some experts predict that they will decline again in the subsequent years, which could boost the housing market.
- Supply and demand: The Texas housing market has been characterized by a mismatch between supply and demand for several years. The state has not built enough homes to keep up with the population growth and migration, which has created a shortage of inventory and pushed up home prices. However, some signs of improvement have emerged recently, as more homes are being built and listed for sale. This could ease some of the pressure on home prices and create more balance in the market.
- Affordability: The rapid rise in home prices in Texas has eroded the affordability of housing for many buyers, especially first-time buyers and low-income buyers. According to Zillow, the average home value in Texas is $300,090, down 1.8% from a year earlier. However, Texas still remains more affordable than many other states in the nation, especially compared to coastal markets like California and New York.
- Economic growth: The Texas economy has been one of the strongest and most diversified in the nation, especially during the pandemic. The state has added jobs at a faster rate than most other states and has attracted many businesses and workers from other states. The economic growth in Texas has fueled the demand for housing, as well as increased consumer confidence and spending. However, there are some risks and uncertainties that could affect the economic outlook.