Texas may be in for another year of robust housing market growth.
Texas’ housing market was red hot in 2023, but is this sustainable in 2024? That is what Texas A&M’s Texas Real Estate Research Center (TRERC) sought to examine with its new 2024 Texas Real Estate Forecast.
“Texas is a real estate trendsetter when it comes to residential, commercial, and land markets in the U.S.,” said TRERC, noting that “four Texas housing markets— Dallas-Fort Worth, Houston, Austin, and San Antonio—outranked every U.S. real estate market in 2023.”
Overall, Texas appears to be on track for another year of record-setting growth, according to the report. The state’s key macro drivers set to accelerate in 2024 include economic output (2.0% to 2.5%), jobs (1.1% to 2.7%), nominal income (2.7% to 3.8%), and population growth (1.0% to 2.0%).
For single-family homes, TRERC forecasts that the supply of new homes will increase in 2024 relative to 2023 and that home prices will remain flat over the year.
With almost 4% growth over last year, TRERC expects construction to “match pre-COVID levels” in 2024. Furthermore, following the historic rise in single-family home prices post-COVID, TRERC says, “At best, average overall home price levels could remain flat or, at most, dip slightly — but stay near $340,000.”
Rent prices for single-family homes are forecast to fall in 2024, continuing a trend that began in 2023, TRERC says. Although sales of single-family homes have “not bottomed out,” TRERC forecasts total sales to remain flat at about 330,000 units in 2024.
“Lower interest rates for at least part of 2024 may boost this somewhat,” said TRERC in the report.
New sales are predicted to influence the results, accounting for “a larger-than-average share of total sales” at around 20%, according to the report.
Overall, Texas’ new home construction “hammered” other U.S. markets in 2023, with DFW, Houston, Austin, and San Antonio named the top homebuilding markets in the United States. TRERC forecasts this trend to continue in 2024.
