Winter Storm Put a Chill on North Texas Home Sales
North Texas’ speeding home market hit a patch of ice in February. After months of significant year-over-year gains, sales of single-family homes in the area were down 8% from February 2020 totals. And last month’s deep freeze was to blame.
“It was the effects of the winter storm,” said Luis Torres, economist with the Texas Real Estate Research Center. “The Texas economy practically shut down for a whole week.” It was the first such annual homebuying decline since the early days of the COVID-19 pandemic, when lockdowns kept buyers on the sidelines.
Since then, record low mortgage rates have fueled an unprecedented homebuying rush in North Texas. Only 6,958 single-family home purchases were completed in North Texas last month, according to data from the Texas Real Estate Research Center and North Texas Real Estate Information Systems. Many home sales that were set to close in late February were pushed into March. That caused February’s home sales total to fall to the lowest level in more than a year.
With mortgage rates rising and the supplies of homes up for sale still falling, analysts anticipate that North Texas homebuyers will be challenged in the months ahead.
“Going forward, we do expect a slowdown due to the low inventory of homes for sale, especially in the price range below $300,000, causing home prices to increase at higher rates, and an increase in mortgage rates due to increasing inflation expectations,” Torres said. “But overall, do expect the housing market to remain strong during 2021.”
While total sales were down in February, median home sales prices hit an all-time high — up 14% from a year ago to $302,920. That’s more than double the median North Texas sales price a decade ago. At the end of February, only 6,687 single-family homes were listed for sale with real estate agents, the lowest home inventory in decades. Home sales listings were down a whopping 68% from February 2020.
“Going forward is important for the number of listings to increase for sales to strongly rebound,” Torres said. “The major headwind for the housing market is the lack of inventory of homes for sale that’s also is driving up prices.”
Pending home sales were also down in February by 19% from 2020, which means fewer purchase contracts were signed during the month.
“I wouldn’t be surprised to see some rebound in March,” said Ted Wilson, principal with Dallas-based housing analyst Residential Strategies. “On top of this, there continues to be a shortage of listings, so that is acting as a governor to the market on the volume of resales as well.”
The tight market is pushing sales prices ever higher...
