Why Texas Could Become Epicenter of America’s Housing Downturn
Summary
Texas is facing a large surplus of homes for sale, which is causing home prices to drop in many parts of the state. This surplus happened because Texas built a lot of new houses during 2020-2024, but fewer people are moving there now and higher mortgage rates have made buying homes more expensive.Key Facts
- Texas gained over 2.1 million people from 2020 to 2024, sparking a big increase in new home construction.
- Builders created many new homes when mortgage rates were low (around 3%), but rates have since risen to about 7%.
- The number of homes for sale in Texas is about twice as many as are being bought each month.
- Nearly half (48%) of homes listed in Texas have had their prices cut to try to attract buyers.
- Home sales in Texas fell by 4% in July compared to the previous year.
- Since August 2022, Texas housing prices have dropped by around 9%, and home inventory has increased by over 76%.
- Texas cities like Dallas, Houston, Austin, and San Antonio contributed about 15% of all new homes built in the U.S. since 2020.
- The housing market slowdown in Texas is called a "correction," but some experts warn it could worsen as buyers struggle with high prices and mortgage costs.
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