Home prices soared to new highs in March with Austin leading the gains among Texas cities, although the market is showing signs of easing as some buyers are being priced out by rising costs and higher interest rates, according to a new Realtor.com report.
The median list price reached $405,000 nationally in March, up 13.5 over the year, according to Realtor.com’s Monthly Housing Trends Report, and 26.5 percent higher than March 2020.
“Despite the $405,000 price tag, March data reveals we are starting to take some steps towards a more balanced market,” Danielle Hale, chief economist for real estate listing marketplace Realtor.com, said in the report. “Buyer demand is moderating in the face of high costs, and we’re beginning to see more homeowners take price cuts on their listings and overall inventory declines lessen in response. Assuming all these factors and new construction hold steady, we could begin to see inventory increases this summer — welcome news for buyers who have endured pandemic home shopping and can continue their journey despite higher buying costs.”
Austin posted some of the highest price gains in the country, with the average asking price rising 30 percent to $600,000. Among the top 50 metros, prices went up most in Miami, rising 37 percent to a median price of $547,000, followed by Las Vegas (up 35.2 percent to $480,000) and Tampa (up 32 percent to $399,000).
Among big Texas cities, Dallas showed the second biggest increase, rising 17.6 percent to $425,000. Prices in Houston rose by 9.5 percent to $374,000, while the median price in San Antonio reached $357,000, up 15.4 percent.
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The median list price and year over year gain:
Austin: $600,000, 30.0%
Dallas: $425,000, 17.6%
Houston: $374,000, 9.5%
San Antonio: $357,000, 15.4%
Mortgage rates, meanwhile, continued their upward track. The average rate on a 30-year fixed-rate mortgage rose to 4.67 percent Thursday, up from 4.42 percent last week and a point and a half higher than the 3.18 percent rate a year ago, according to Freddie Mac, a Washington D.C.-based national real estate finance association.
“Purchase demand has weakened modestly but has continued to outpace expectations. This is largely due to unmet demand from first-time homebuyers as well as a select few who had been waiting for rates to hit a cyclical low,” said Sam Khater, Freddie Mac’s chief economist, in a statement.
With demand beginning to moderate and new construction at near 16-year highs, there may be more to choose from this summer as listings, which had been on the decline, are predicted to grow year-over-year in June or July, according to Realtor.com.
More sellers dropped their list prices compared with those during March 2021, according to Realtor.com. The share of homes having their price reduced increased slightly to 6.0 percent in March, but still remains 9 percentage points below typical 2017 to 2019 levels.
In Houston, 7.5 percent of sellers lowered the list price, down slightly from March 2021, according to Realtor.com.
Austin homes showed the greatest growth in the share of homes with price reductions compared to last year — up 2.9 percentage points to 5.3 percent.
A low supply of homes on the market continued to be a challenge for buyers. The number of active listings decreased by 18.9 percent year-over-year in March, an improvement in the rate of decline compared with the 24.5 percent decrease in February.
The number of active listings in Dallas declined by 21 percent over March 2021 in Dallas, 17.2 percent in Houston and 9.4 percent in San Antonio. Austin had a 2.9 percent increase in active listings.
Austin was one of only six of the largest 50 metros with a growth in inventory, along with Riverside, Calif., Sacramento, Calif., Kansas City, Detroit and Phoenix.
Homes in Houston spent an average of 39 days on the market or 12 days less than last year, according to Realtor.com. Homes in Austin sold the quickest, spending 17 days on the market in March or 18 fewer days than last year.