Texas is experiencing a cooling housing market as new home sales declined for the third consecutive month in August, even while inventory climbed to record levels.
The latest report from HomesUSA.com, based on MLS data from the state’s four largest markets, paints a challenging picture for both builders and buyers.
Statewide, active listings jumped to 36,250 in August, a 13.3% increase from July and the highest since tracking began in 2017.
Houston led the surge with 15,315 active listings, up from 14,570 the previous month.
“Declining new home sales isn’t surprising after the activity we saw this spring,” said Ben Caballero, CEO of HomesUSA.com. “Builders are sitting on one of the largest inventories in years and are ready to respond if rates provide any flexibility.”
Diverging Trends: Sales vs. Prices
While sales slowed, home prices in Texas continued to climb. The statewide average for a new home rose to $428,826 from $425,204 in July.
Austin led price growth, with the average new home reaching $500,715, up from $489,692. Caballero noted that builders maintaining prices despite growing inventory signals confidence in long-term demand.
New home sales dropped across all major markets:
- Houston: 2,125 (down from 2,281)
- Dallas-Fort Worth: 2,027 (down from 2,141)
- Austin: 799 (down from 854)
- San Antonio: 890 (down from 948)
Pending new home sales—a key indicator of future closings—also softened, falling statewide to 6,582 in August from 6,804 in July.
National Context and Outlook
Builders nationwide remain cautious, with the NAHB/Wells Fargo Housing Market Index steady at 32 for September. Expectations for future sales improved slightly, reaching 45—the highest since March—while buyer traffic remained weak at 21.
Affordability pressures, shifting buyer preferences, and rising interest rates continue to weigh on the market.
Housing starts also dropped to an annual rate of 1.31 million, down 8.5% from July and 6% from last year, highlighting broader challenges for the sector.
Despite the slowdown, the pace of sales is showing minor improvement.
Statewide, Days on Market (DOM) for new homes decreased slightly to 106.5 days, with Houston leading major markets at 89.1 days.
Texas builders are navigating a tricky market: strong inventories, slowing sales, and steady prices.
How long this cooldown will persist may depend on interest rates, buyer confidence, and broader economic conditions.
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