TEXAS HOUSING INSIGHT

Transcription

1 TEXAS HOUSING INSIGHT JAMES P. GAINES CHIEF ECONOMIST WAYNE DAY RESEARCH ASSISTANT LUIS B. TORRES RESEARCH ECONOMIST TECHNICAL REPORT AUGUST 2016 TR

2 Contents About this Report... 3 June 2016 Summary... 4 Supply... 6 Residential Construction Coincident and Leading Indicator... 6 Single-Family Housing Construction Permits... 6 Major Metros Single-Family Housing Construction Permits... 7 Border Metros Single-Family Housing Construction Permits... 7 Housing Starts... 8 Total New Private Single-Family Construction Value... 8 Months of Inventory... 9 Major Metros Months of Inventory... 9 Border Metros Months of Inventory Demand Housing Sales Major Metros Housing Sales Border Metros Housing Sales Year Mortgage Rate and 10-Year Bond Yield Texas Home Days on Market Major Metros Existing Homes Days on Market Border Metros Existing Homes Days on Market Major Metros New Homes Days on Market Border Metros New Homes Days on Market Prices Housing Price Index Major Metros Housing Price Index Median Sales Price Major Metros Median Sales Price Border Metros Median Sales Price United States Existing and New Home Average Sales Price... 17

3 Texas Existing and New Home Average Sales Price Major Metros Existing Home Average Sales Price Border Metros Existing Home Average Sales Price Major Metros New Home Average Sales Price Border Metros New Home Average Sales Price United States Existing and New Home Median Sales Price Texas Existing and New Home Median Sales Price Major Metros Existing Home Median Sales Price Border Metros Existing Home Median Sales Price Major Metros New Home Median Sales Price Border Metros New Home Median Sales Price Texas Home Average Price Per Square Foot Major Metros Existing Home Average Price Per Square Foot Border Metros Existing Home Average Price Per Square Foot Major Metros New Home Average Price Per Square Foot Border Metros New Home Average Price Per Square Foot Texas Home Median Price Per Square Foot Major Metros Existing Home Median Price Per Square Foot Border Metros Existing Home Median Price Per Square Foot Major Metros New Home Median Price Per Square Foot Border Metros New Home Median Price Per Square Foot Texas Home Sale Price to List Price Ratio Major Metros Existing Home Sale Price to List Price Ratio Major Metros New Home Sale Price to List Price Ratio Housing Opportunity Index (Affordability Index)

4 About this Report Real Estate Center economists continuously monitor many facets of the global, national, and Texas economies. Texas Housing Insight is a summary of important economic indicators that help discern trends in the Texas housing markets. This monthly publication provides data and insights on the Texas housing markets. We hope you find them useful. Your feedback is always appreciated. Send comments and suggestions to info@recenter.tamu.edu. Dr. James Gaines, Dr. Luis Torres and Wayne Day Data current as of August 5, , Real Estate Center. All rights reserved. 3

5 June 2016 Summary The Texas economy continued to slow down in June. Total employment expanded 1.4 percent yearover-year with a monthly gain of just 7,200 jobs. Job losses again came from the manufacturing and oil and gas extraction sectors, especially in Houston. Housing demand improved moderately while new construction was constrained by a shortage of skilled labor and developed lots. Houston improved in terms of number of total home sales. Austin and San Antonio continued to show strong housing demand, while Dallas-Fort Worth has slowed somewhat in recent months. Supply The Texas Residential Construction Leading Index (RCLI), which signals future directional changes in the residential construction business cycle of single and multifamily housing, increased moderately for the fourth straight month. The RCLI was positively affected by monthly increases in weighted building permits and in housing starts. The Texas Residential Business Cycle (Coincident) Index, the measure of current construction activity, remained flat as it has been the past several months. Both indicators signal a slowdown in current and future residential construction in the State of Texas. Housing starts declined 8.2 percent seasonally adjusted year-over-year in June. Single-family housing construction permits statewide increased 4.1 percent seasonally adjusted despite lagging growth in Houston and San Antonio. Austin continued to trend upwards in permitting after declining in Dallas-Fort Worth building permits continued at a solid pace. No major MSA has reached its prior peak of permitting levels. Houston (3,386) and Dallas-Fort Worth (3,091) led the nation in the number of single-family permits issued followed by Atlanta (2,141), Phoenix (1,946), and Charlotte (1,527). Months of inventory for existing homes across Texas remained low at 3.5 months. The months of inventory has remained fairly stable since May The nation reported 4.9 months of inventory (around 6.5 months of inventory is considered balanced). Demand In June, total Texas housing sales increased 1.8 percent year-over-year seasonally adjusted (positive 1.8 percent on a nonseasonally adjusted basis) compared with 1.7 percent in the nation (positive 1.9 percent on a nonseasonally adjusted basis). Austin and San Antonio posted solid yearover-year home sales increases. Dallas-Fort Worth continued to weaken month-over-month since reaching a peak in December Houston posted a negative 0.8 percent year-over-year seasonally adjusted rate (negative 0.5 percent not seasonally adjusted) concurrent with a long period of weakening due to the impact of the energy sector decline. Texas year-over-year sales growth exceeded the U.S. for the fifth straight month. Mortgage interest rates remained below 4 percent. The Federal Home Loan Mortgage Corporation reported a 3.57 percent average rate on a 30-year, fixed-rate mortgage while the ten-year U.S. Treasury bond yield equaled 1.64 percent. 4

6 The number of days an existing home was on the market in June remained low at 53 days relative to prior periods reflecting the tight supply. A 91-days, new homes registered longer sales periods than existing homes. The average statewide difference to sell a new home versus an existing home was 38 days. In number of days, Austin (102) and Houston () new homes took longer to sell compared with Dallas-Fort Worth (75) and San Antonio (83). Prices Average and median sales prices have risen dramatically in Texas since 2011 and continued to climb in June. The constrained supply in conjunction with strong demand accelerated price gains. Austin was the house-price-appreciation leader with prices remaining well above the other major metros. Nonenergy employment growth and a strong services sector caused Dallas-Fort Worth to also register strong price appreciation. Due to recent declines in the energy sector and the resulting economic slowdown, Houston has begun to exhibit some softening in the rate of price growth. San Antonio price increases have also softened somewhat. Texas' existing and new home sales prices have steadily climbed in the major metros, although new home prices demonstrated some downward pressure in recent months. The difference from the initial listing price to the actual sales price for new homes has steadily widened in Texas since early In contrast, for existing homes, the price difference after increasing in previous months has flattened, comparable to the ratio for new home sales. This probably reflects a change in market conditions for sellers of new homes. Median new home prices have exceeded existing home prices by 48 percent and by 37 percent based on average sales prices since This price differential results primarily because of increases in home size for newer homes and the significant increases in construction and land costs. The average price per square foot for a new Texas home is approximately 19 percent more than for an existing home. With rapid price appreciation, Texas affordability continues to fall relative to the U.S., especially in the major MSAs. The Housing Opportunity Index for Austin, Dallas, and Houston are found to be below the national value indicating they are relatively less affordable than the rest of the country. In contrast, Fort Worth is found to be relatively more affordable than the nation, while San Antonio seems to register relatively the same affordability as the U.S. Note: Recent changes in the Real Estate Center s data reporting have included shifting from reporting on Multiple Listing Service (MLS) areas to a Metropolitan Statistical Area (MSA). In this report, the respective charts reflecting these changes include Construction Value, Months of Inventory, Housing Sales, and Median Housing Prices. 5

7 Supply Residential Construction Coincident and Leading Indicator (Index Jan 2007 = ) Texas Coincident Index United States Coincident Index Texas Leading Index Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Sources: Real Estate Center at Texas A&M University and Federal Reserve Bank of Dallas Single-Family Housing Construction Permits (Index Jan 2007 = ) United States Texas Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University 6

8 Major Metros Single-Family Housing Construction Permits (Index Jan 2007 = ) Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University Border Metros Single-Family Housing Construction Permits (Index Jan 2007 = ) Brownsville-Harlingen Laredo El Paso McAllen-Edinburg-Mission Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University 7

9 Housing Starts (Index Jan 2007 = ) United States Texas Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Source: U.S. Census Bureau and Bank of Tokyo-Mitsubishi UFJ 120 Total New Private Single Family Construction Value (Index Jan 2007 = ) Texas Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Note: Inflation adjusted. Seasonally adjusted and detrended. University 8

10 Months of Inventory (Months) United States Texas 3 Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Source: U.S. Census Bureau and Real Estate Center at Texas A&M University 9 Major Metros Months of Inventory (Months) Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Sources: Real Estate Center at Texas A&M University 9

11 Border Metros Months of Inventory (Months) Brownsville-Harlingen Laredo El Paso McAllen-Edinburg-Mission Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 University Demand Housing Sales (Index Jan 2007 = ) United States Texas Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 University and National Association of Realtors 10

12 Major Metros Housing Sales (Index Jan 2007 = ) Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Note: Seasonally adjusted sales reported by MLS and detrended. University Brownsville-Harlingen Laredo Border Metros Housing Sales (Index Jan 2007 = ) El Paso McAllen-Edinburg-Mission Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Note: Seasonally adjusted sales reported by MLS and detrended. El Paso: 5/10 is estimated. Laredo: 7/10 is estimated. McAllen-Edinburg-Mission: 4/10 is estimated University 11

13 Year Mortgage Rate and 10-Year Bond Yield (Percent) Mortgage Bond Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Note: Seasonally adjusted. Source: Federal Home Loan Mortgage Corporation and Federal Reserve Board Texas Homes Days on Market (Days) Existing Home Days on Market New Home Days on Market 50 12

14 Major Metros Existing Homes Days on Market (Days) Border Metros Existing Homes Days on Market (Days) Brownsville-Harlingen Laredo El Paso McAllen-Edinburg-Mission

15 Major Metros New Homes Days on Market (Days) Border Metros New Homes Days on Market (Days) Brownsville-Harlingen Laredo El Paso McAllen-Edinburg-Mission 14

16 Prices Housing Price Index (Index Q1 2007=) United States Texas I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II Note: Seasonally adjusted. Source: Federal Housing Finance Agency Major Metros Housing Price Index (Index Q1 2007=) Dallas-Plano-Irving Fort Worth-Arlington El Paso I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II Note: Seasonally adjusted. Source: Federal Housing Finance Agency 15

17 240, , , , ,000 1,000 1,000 1,000 1, , , ,000 Median Sales Price United States Texas Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Source: U.S. Census Bureau and Real Estate Center at Texas A&M University 2,000 2, ,000 Major Metros Median Sales Price 220, ,000 1,000 1, , ,000 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Sources: Real Estate Center at Texas A&M University 16

18 1,000 1, ,000 Brownsville-Harlingen Laredo Border Metros Median Sales Price El Paso McAllen-Edinburg-Mission 140, , ,000,000,000,000,000 Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 University 3,000 3, ,000 United States Existing and New Home Average Sales Price Existing Home Average Sales Price New Home Average Sales Price 320, ,000 2,000 2, , , ,000 Source: Federal Reserve Bank of St. Louis 17

19 350, , ,000 Texas Existing and New Home Average Sales Price Existing Home Average Sales Price New Home Average Sales Price 2,000 2, , , ,000 1,000 1,000 3, , , ,000 2,000 2, , , ,000 1,000 1,000 Major Metros Existing Home Average Sales Price Sources: Real Estate Center at Texas A&M 18

20 1,000 1,000 Border Metros Existing Home Average Sales Price Brownsville-Harlingen Laredo El Paso McAllen-Edinburg-Mission 1,000 1, , , , ,000, ,000 3,000 3, , ,000 Major Metros New Home Average Sales Price 300,000 2,000 2, , ,000 Sources: Real Estate Center at Texas A&M 19

21 210,000 Border Metros New Home Average Sales Price 200,000 1,000 1,000 1,000 1, , , ,000 Brownsville-Harlingen Laredo El Paso McAllen-Edinburg-Mission 320, ,000 2,000 United States Existing and New Home Median Sales Price Existing Home Median Sales Price New Home Median Sales Price 2, , , ,000 1,000 1,000 Source: Federal Reserve Bank of St. Louis 20

22 310,000 2,000 2,000 Texas Existing and New Home Median Sales Price Existing Home Median Sales Price New Home Median Sales Price 250, , ,000 1,000 1, , ,000 2,000 2, ,000 Major Metros Existing Home Median Sales Price 220, ,000 1,000 1, , ,000 Sources: Real Estate Center at Texas A&M 21

23 Border Metros Existing Home Median Sales Price 1,000 1, , , , ,000,000,000,000 Brownsville-Harlingen Laredo El Paso McAllen-Edinburg-Mission, , , ,000 Major Metros New Home Median Sales Price 2,000 2, , , ,000 1,000 Sources: Real Estate Center at Texas A&M 22

24 1,000 Border Metros New Home Median Sales Price 1,000 1,000 1, , , , ,000,000 Brownsville-Harlingen Laredo El Paso McAllen-Edinburg-Mission Texas Home Average Price Per Square Foot Existing Home Average Price PSF New Home Average Price PSF 23

25 Major Metros Existing Home Average Price Per Square Foot Sources: Real Estate Center at Texas A&M Border Metros Existing Home Average Price Per Square Foot Brownsville-Harlingen El Paso Laredo McAllen-Edinburg-Mission

26 Major Metros New Home Average Price Per Square Foot Sources: Real Estate Center at Texas A&M Border Metros New Home Average Price Per Square Foot Brownsville-Harlingen Laredo El Paso McAllen-Edinburg-Mission

27 Texas Home Median Price Per Square Foot Existing Home Median Price PSF New Home Median Price PSF Major Metros Existing Home Median Price Per Square Foot Sources: Real Estate Center at Texas A&M 26

28 95 Border Metros Existing Home Median Price Per Square Foot Brownsville-Harlingen Laredo El Paso McAllen-Edinburg-Mission Major Metros New Home Median Price Per Square Foot Sources: Real Estate Center at Texas A&M 27

29 Border Metros New Home Median Price Per Square Foot Brownsville-Harlingen Laredo El Paso McAllen-Edinburg-Mission 0.99 Texas Home Sale Price to List Price Ratio Existing Home Sale-to-List Price Ratio New Home Sale-to-List Price Ratio

30 0.99 Major Metros Existing Home Sale Price to List Price Ratio Sources: Real Estate Center at Texas A&M 0.99 Major Metros New Home Sale Price to List Price Ratio Sources: Real Estate Center at Texas A&M 29

31 Housing Opportunity Index (Affordability Index) (Index) United States Dallas-Plano-Irving Fort Worth-Arlington Houston-Sugar Land-Baytown I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II Note: Seasonally Adjusted Source: National Association of Home Builders and Wells Fargo 30

32 MAYS BUSINESS SCHOOL Texas A&M University 2115 TAMU College Station, TX DIRECTOR GARY W. MALER ADVISORY COMMITTEE RUSSELL CAIN, CHAIRMAN Port Lavaca MARIO A. ARRIAGA Conroe JACQUELYN K. HAWKINS Austin TED NELSON Houston DOUG ROBERTS Austin DOUG JENNINGS, VICE CHAIRMAN Fort Worth KIMBERLY SHAMBLEY Dallas RONALD C. WAKEFIELD San Antonio C. CLARK WELDER San Antonio BILL JONES, EX-OFFICIO Temple i