Existing homes sold in June through Texas Multiple Listing Services (MLSs) surpassed 29,000 for the first time since August 2019. Housing experts for the Real Estate Center at Texas A&M University point out the trend may not last.
“Texas’ housing market rebounded after two and a half months of sluggish activity amid the economic shutdown and social distancing measures,” said James Gaines, chief economist for the Real Estate Center. “June housing activity recovered substantial pent-up demand from the economic shutdown.”
After accounting for seasonal factors, the state’s MLS homes sales increased 34% relative to May but remained below first-quarter levels. “This positive momentum, however, may be temporary as new coronavirus cases have accelerated in recent weeks,” said Gaines.
According to the National Association of Realtors, existing-home sales across the country exhibited a similar pattern with a 20.7 percent increase from May but remained subdued on a year-over-year basis. Low mortgage rates bolstered demand for first-time homebuyers, which accounted for 35% of national sales in June.
Center Research economist Luis Torres said there are fundamental challenges facing the housing market in addition to the COVID-19 pandemic.
“The months of inventory for existing homes plummeted to a record low of 2.7 months, exacerbating shortages, particularly for homes priced less than $300,000,” said Torres. “The number of new listings hitting the market stabilized but lagged year-ago levels by nearly 9 percent. This imbalance has housing affordability implications, as evidenced by a 4 percent year-over-year increase in the Texas Repeat Sales Index.”
The median price for an existing Texas home sold jumped from $235,000 in May to $250,000 in June. Texas remained price competitive relative to the rest of the nation, where the median price was $284,600. “While June was a positive month for sales activity, the resurgence in contracted coronavirus cases and hospitalizations could reverse the recovery and remains the greatest obstacle to the housing market,” Torres said.