The Lone Star State outpaces every one of the other 49 in both median household income growth and new-home sales in 2013.
That’s the word from the Texas Association of Realtors in their 2014 Texas Home Buyers and Sellers Report.
“This year’s Texas Homebuyers and Sellers Report is showing the impact of the last few years’ strong housing market and economic growth on Texas homebuyers and sellers,” said Dan Hatfield, chairman of the Texas Association of Realtors. “Households are earning more income and new-home development continues to play an increasingly important role to meet our state’s ever-increasing housing demand.”
The median household income of Texas homebuyers increased 9.6% to $91,700 from 2012 to 2013. This is nearly double the increase in median household income among U.S. homebuyers, which increased 5.6% to $83,300 during the same time frame.
Increases in median household income for first-time and repeat homebuyers in Texas were also significant, increasing 9.3% year-over-year to $67,800 for first-time homebuyers and 4.9% year-over-year to $107,100 for repeat buyers in 2013.
Nationally, these figures increased 8.3% to $67,400 for first-time homebuyers and 3% to $96,000 for repeat homebuyers.
Part of the reason real estate is doing well compared to the nation is that Texas’ economy is doing well compared to the nation.
The Urban Land Institute ranked Houston, Dallas-Fort Worth, Austin, and San Antonio among the markets to watch for in its “Emerging Trends in Real Estate 2014" report because of expected gains in manufacturing, professional services, corporate relocations, above-average population growth and expansion in energy, health-related and distribution industries.
The Texas A&M University Real Estate Center posits four reasons the Texas housing market and economy as a whole is running so much hotter than the rest of the nation.
1. Job Growth
Texas has continually outperformed the national average for job growth. Often Texas is double the national average. That job growth is likely to continue through 2014. Texas has added over 459,000 jobs since January 2012.
2. Mortgage rates still cheap
Yes, mortgage rates are increasing and will likely continue by all accounts to climb in 2014, but they are still ridiculously cheap. Point is, with jobs marginally higher, and mortgage interest rates lower than historical levels, interest rates do not provide a dampener to home purchases.
3. Affordability is not a Texas challenge
A look at the price index for Texas real estate in key markets shows that prices are not nearly as much of a challenge in terms of affordability than can be seen elsewhere.
4. Limited inventory = greater demand
The whole state of Texas has just four months of inventory. Because of the limited inventory, prices are expected to continue to increase smartly. Home builders will not be able to build homes fast enough to meet the demand.
New home sales were an amazing 30% of all Texas purchases in 2013, a 4% increase from 2012 and nearly double the share of new homes among U.S. home sales during the same time frame. Nationally, the share of new home sales remained constant at 16% of all U.S. home purchases in 2013.
The highest share of homebuyers continued to be married couples. In Texas, the number of married homebuyers increased from 69% to 71% from 2012 to 2013, compared to an increase of 65% to 66% nationally. This is the highest share for married couples since 2001.
The percentage of first-time homebuyers in Texas decreased 2% to 33% of all Texas homebuyers in 2013 – which matches the national rate of 33%.
The typical Texas homebuyer was 43 years old, while the average first-time buyer was 31 years old and the average repeat buyer was 50 years old.
The tenure of owning a home in Texas decreased one year to eight years in 2013, but remained unchanged at nine years nationally.