Home sales are dropping in several major Texas cities including the capital Austin, Dallas, and Houston, as homebuyers burdened by historically high mortgage rates and rising housing costs fail to see the appeal of the state’s growing inventory.
According to Norada Real Estate Investments, it could be the beginning of “a major correction phase” for the state.
Why It Matters
The Lone Star state’s housing market boomed during the pandemic, when the rise of remote work allowed out-of-state Americans to relocate to cities offering cheaper homes, lower taxes, and relatively more affordable cost of living, as well as vibrant job markets and sunny weather. This growth in demand at a time when the state, like the rest of the country, was struggling with low levels of inventory, sent home prices skyrocketing.
Spurred by this sudden surge in demand, Texas started building more new homes than any other state in the country—with the exception of Florida—but this inventory is now landing on the market without finding many interested buyers, adding up to existing homes listed for sales which are sitting idle for long periods of time before going under contract…