The Texas real estate market is one of the most dynamic and competitive in the United States. Texas has a population of nearly 30 million people, making it unsurprising why so many people are buying and selling property. In the long-term, the Texas housing market is expected to remain strong. For many years, the Lone Star State has been one of the most popular places to live and buy real estate.
But with ever-changing economic conditions, what can we expect for the Texas housing market in 2023? Let’s take a closer look at some of the factors that will shape the future of real estate in Texas.
2023 Changes to Texas Housing Market
There are quite a few aspects to take into consideration when looking at the Texas housing market as a whole. From economic changes to population and job growth, it’s easy to expect a range of changes within the Texas housing market.
Economic Outlook: Supply and Demand
The economic outlook for 2023 is looking relatively positive for Texas. According to recent National Association of Realtors reports, Texas home sales are expected to increase by nearly 10% over 2020 levels. This indicates that there will be plenty of potential buyers out there looking for homes and investment opportunities in 2023.
Mortgage rates remain low across the country and are key to the health of the housing market. With lower rates more first-time homebuyers and investors are able to purchase as opposed to before due to higher interest rates. Though, this decrease could lead to more competition among buyers as well, which may drive up prices further.
Another factor that will shape the future of real estate in Texas is supply and demand. As previously mentioned, home sales are expected to rise significantly over 2020 levels in 2023. There’s still a question as to whether this increased demand can be met with an adequate supply of available homes on the market. If there’s not enough supply to meet demand then prices could skyrocket even further than recent years. This can make it increasingly difficult for prospective buyers to find affordable homes.
The median home price in Texas is currently about $258,000 and has been steadily increasing for some time now. Luckily, it’s expected to slow down over the next few years as increases in home prices start to level out. This means that while home prices are still on the rise, it may not be as dramatic as past housing increases.
Strong Job Growth Will Support Homeownership
Texas has seen strong job growth over the last few years and this trend is expected to continue into 2023. This allows more people access to better jobs with higher salaries, enabling buyers to purchase without enduring a heavier financial impact. With more money coming into households, buying a house becomes much more attainable for many potential buyers who may have otherwise had difficulty qualifying for a mortgage loan.
Population Increase Driving Demand for Housing
The population of the state of Texas continues to grow at a steady rate, heavily influencing real estate trends. This means there will be more people looking for homes and rental properties than ever before. A spike in population drives up the demand for housing and puts pressure on the supply of homes. An issue that may further increase home prices over time for the Lone Star state. Investors who are looking for a good return should consider investing in real estate in Texas sooner rather than later.
The Future of Texas Real Estate is Now
Despite the short-term dip in prices, most experts believe that the long-term outlook for the Texas housing market is positive. They cite increasing population growth (especially from out-of-state buyers) and strong job growth as two major drivers of this optimism. Additionally, low interest rates are expected to remain low until at least 2024, which should continue to drive home buying activity.
There is also expected to be an uptick in investment properties across the state due to a lack of housing inventory. This alone can make it more difficult for first-time buyers to enter the market. With investors looking to capitalize on these opportunities, it’s likely that rental rates will rise over the next few years, too.
All signs indicate that the Texas real estate market is primed for success in 2023. Home prices are expected to remain steady while population growth continues driving up demand for housing across the state. And with strong job growth providing households with more money coming into their pockets each month, homeownership becomes even more feasible for many potential buyers who may have previously struggled financially when trying to qualify for a mortgage loan. Of course no one can predict exactly what will happen over this year, but now is a great time to invest in Texas real estate.