Texas’ housing market shows signs of cooling down after the pandemic drove it to new heights

Texas had more houses on the market in July than any time since late 2020 as home sales declined in the state’s major metros. Sellers have had to cut prices to entice buyers.

After years of sharp rises in home prices and stiff competition to buy a home amid the COVID-19 pandemic, the Texas housing market is starting to cool off.

Until recently, buyers competing for a limited supply of homes routinely had to pay more than the asking price and make offers on the spot. Now there are more homes for sale in Texas than at any time since fall 2020 — when the state’s pandemic housing crunch kicked off in earnest.

Home sales in Texas declined by more than 5% in the three months from April to June compared with the same period last year, data from the Texas Real Estate Research Center at Texas A&M University show. The Dallas-Fort Worth, Houston and San Antonio metropolitan areas saw similar drop-offs. In Austin, home sales have fallen more sharply — by 12%.

And after two years of a red-hot market, many sellers have cut prices to try to lure buyers who are facing higher mortgage rates, bloated home prices and inflation. That’s a sign that buyers are starting to gain an edge, real estate experts told The Texas Tribune.

“It’s still a seller’s market,” said Elizabeth McCoy, a Fort Worth real estate agent. “But certainly we’re seeing buyers be able to have a little bit more choice. And that’s such a good thing.”

That’s a marked shift from the height of the pandemic when historically low mortgage rates and a shift to working from home drove buyers — including Millennials who had postponed becoming homeowners — to snatch up houses so fast that the state’s supply plummeted and home prices rose an average of 28% between the start of the pandemic and the end of 2021.

Since the Federal Reserve began raising interest rates in the spring to try to slow rampant inflation, pushing mortgage rates higher too, the trend has...

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