What's in store for Texas real estate in 2024
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Real estate experts predict Texas' major markets will be less stagnant — but not wildly different — in 2024.
Why it matters: Mortgage rates have dipped from two-decade highs that froze the housing market, shutting out first-time shoppers and locking homeowners in place.
What's happening: The state's sales might get a boost from below-7% rates, but the total is expected to stay flat compared to 2023, according to the Texas Real Estate Research Center at Texas A&M University.
- Many Texans are unlikely to budge unless rates drift back down to around 3-4%, research director Daniel Oney tells Axios.
Zoom out: If the economy is steady, rates could land around 6%. If the economy stumbles, they could fall more significantly, says Greg McBride, Bankrate's chief financial analyst.
- No one can say with certainty just how much mortgage rates will change because they're impacted by inflation and the Federal Reserve.
The latest: The Fed signaled that 2024 could bring significant interest rate cuts, Axios' Neil Irwin and Courtenay Brown report.
State of play: Inventory of existing homes is recovering from the pandemic home-shopping frenzy faster in Texas metros than other parts of the country, according to Orphe Divounguy, senior economist at Zillow.
- Austin (+26%) and San Antonio (+8%) are two of three major U.S. metro areas with more inventory on the market compared to pre-pandemic December 2019, per Zillow.
- Meanwhile, the shortfalls in Dallas (-21%) and Houston (-20%) are well below the national average, Divounguy tells Axios.
What we're watching: Lower mortgage rates won't clear all buyer hurdles, and actually could push home prices higher if demand surges and inventory remains low.
- Oney's forecast generally calls for Texas' economy to outperform the nation, which should strengthen demand across the state.
- "Unfortunately for people trying to buy homes, we don't think housing prices are going to come down a lot," he says.
Go deeper: San Antonio, Houston rank among the coolest housing markets for 2024