Supply may be ticking downwards elsewhere, but Texas is seeing available inventory climb
Texas new home sales declined for the third consecutive month in August, even as active listings soared to a record high, according to the latest Texas New Home Sales Report from HomesUSA.com.
The report, based on MLS data from the state’s four largest markets, highlighted a challenging environment for builders and buyers alike, with rising inventories and softening contract activity.
Active listings for new homes statewide climbed to 36,250 in August, up from 35,064 in July. This is a 13.3% year-over-year increase and the highest level since HomesUSA.com began tracking the data in 2017.
Houston led the surge, posting 15,315 active listings, up from 14,570 the previous month.
“Declining new home sales is not surprising after what we saw this spring,” Ben Caballero, CEO of HomesUSA.com, said.
“Texas builders continue to build one of the largest inventory benches we’ve seen in years. They’re prepared, if rates give them any room, they’ll be ready to put that inventory to work.”
Sales volume and prices diverge
Sales volume dropped across all major markets. The statewide three-month moving average of new home sales fell to 5,841 in August from 6,225 in July. Houston led in volume but posted the largest monthly decline, with sales dropping to 2,125 from 2,281.
Dallas-Fort Worth reported 2,027 sales, down from 2,141; Austin fell to 799 from 854; and San Antonio slipped to 890 from 948.
Despite the sales slowdown, the average price of a new home in Texas edged up to $428,826, compared to $425,204 in July. Austin saw the sharpest increase, with average prices jumping to $500,715 from $489,692.
“Builders are holding firm on pricing even as inventory grows, which is a sign of underlying confidence in long-term demand,” Caballero said.
National trends and future outlook
US homebuilders remained cautious in September, with confidence holding steady at 32 for the fifth straight month, according to the NAHB/Wells Fargo Housing Market Index.
Expectations for future sales improved slightly, rising two points to 45—the highest since March. However, current sales conditions stayed at 34, and buyer traffic slipped to 21, highlighting ongoing demand challenges.
Affordability concerns, limited inventory, and shifting buyer preferences continued to weigh on the market. New data from the Census Bureau and HUD showed housing starts dropped sharply in August to an annual rate of 1.31 million, down 8.5% from July and 6% from a year ago.
Pending new home sales, a leading indicator of future closings, also softened. The statewide average dropped to 6,582 in August from 6,804 in July, with declines in Dallas-Fort Worth, Houston, and Austin. San Antonio was the only major market to post a slight increase.
The pace of sales showed modest improvement, with the average Days on Market (DOM) for new homes statewide falling to 106.51 days in August from 107.61 in July.
Houston remained the fastest-selling major market, with a DOM of 89.10 days, down from 91.50.
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