Texas Home Sales Have Plummeted 11% Despite Cheaper Prices — 3 Factors To Consider Before Moving There
Written by
Yaël Bizouati-Kennedy
Edited by
Nicholas Morine
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Inflation, soaring mortgage rates and low inventory are leaving many homebuyers on the sidelines. As a result, the annual pace of 2023’s existing-home sales was the lowest number recorded since 1995 — with only 4.09 million homes sold — according to a National Association of Realtors report.
And Texas was one of the states which saw a huge decline. Indeed, the Lone Star State saw a 11% drop in home sales in 2023, according to the 2023 Texas Real Estate Year in Review report released by Texas Realtors.
This represented the lowest total sales — 327,921 — since 2016, according to the report.
Yet, at the same time, prices declined 1.4% compared to the previous year, with the median price of a home standing at $335,100.
Despite Rocky 2023, 2024’s Real Estate Market Could Be Strong
This year seems off to a better start, however, as sales have been picking up.
Jenai Hales, a Coldwell Banker real estate agent in the Austin area, said there are several factors contributing to the previous cooling trend. In addition to high mortgage rates, she noted that economic uncertainty — perhaps related to employment and inflation — plays a critical role.
“Potential homebuyers may be adopting a ‘wait and see’ approach amidst these uncertainties, leading to decreased sales. Historically, this strategy is more prevalent during a presidential election year,” she said.
With that being said, she also noted that Texas has seen significant inbound migration in recent years, boosting demand for housing.
“However, as remote work policies evolve and other states become competitive in attracting residents, these patterns may influence sales,” she said.
Yet, she argued that while the Texas housing market is experiencing a period of adjustment, it remains a region rich with opportunity for the informed buyer.
“For those willing to navigate the complexities, the dream of homeownership in Texas is very much alive and well,” she said.
Here are some of the factors to consider before moving there.
High Insurance Prices
As Newsweek reported, the cost of home insurance is increasing in Texas due to the worsening risk of devastating extreme weather events posed by climate change. In turn, homeowners in the state paid, on average, $4,142 a year in 2023. This is $1,361 a year more than the national average, according to Newsweek, citing Insurance.com data.
High Property Taxes
Texas also has very high property taxes, some of the highest in the country, standing at 1.68%, according to Rocket Mortgage. For example, on a median home price of $284,800, the property tax is $4,776.81, Rocket Mortgage added.
No State Income Tax and Low Cost of Living
On the other hand, one advantage of moving to Texas is that there is no state income tax. Texas boasts a lower cost of living than the national average, making it an attractive option for many people looking to relocate, according to Texas Real Estate Source. Indeed, the cost of living in the Lone Star State is typically 6%-8% lower than the national average.
“Even in the most expensive cities like Austin, Dallas, and Plano, the cost of living doesn’t come close to major metro areas in other big states like California. Austin is only about 1% more expensive than the national average, in fact,” according to Texas Real Estate Source.
More From GOBankingRates
