New home prices leveled off in the Texas metropolitan areas, even seeing a drop in their 12-month rolling average, according to the latest New Home Sales report from HomesUSA.com.
Pending home sales increased in Texas, and the pace of new home sales showed improvement in July even as sales prices stabilized, the report showed.
New home prices across the state decreased slightly from a 12-month rolling average of $367,073 for June to $366,383 in July. In the Dallas-Fort Worth area, new home prices dropped to $386,839, down from $387,061 in June. Houston’s decrease was similar, dropping from June’s rolling 12-month average of $367,774 to $366,318 in July, while new home prices in Austin dropped to $294,209 from June’s $294,440.
“New home sales are showing summer strength,” HomesUSA.com Owner Ben Caballero said. “And with new home prices stabilizing after months of steady increases, this is good news for homebuyers.”
But the falling home prices are not a sign of less competition. In fact, for the first time in recent months, all four major Texas new-home markets saw a decrease in the number of days on market from the prior month.
In Houston, the days on market for new homes decreased from a rolling 12-month average of 134.25 days in June to 133.72 days in July. Similarly, the number of days on market in Austin decreased from 112.74 to 112.15, in Dallas-Fort Worth from 122.23 days to 122.18 days and in San Antonio from 106.15 days in June to 105.53 days in July.
While this may seem like a long time compared to the average 30 days on market for existing home sales, new home sales are typically on the market significantly longer.
“There’s a huge difference between selling a new home and a pre-owned or existing home,” Caballero said. “New homes are often listed for sale during the early stages of construction.”
“This early market exposure gives homebuilders the ability to allow buyers the opportunity to customize the home,” he said. “Plus, by placing more inventory on the market as soon as it is being built expands the inventory of available homes, and that’s especially helpful for buyers and agents in a tight housing market.”
But why are home prices decreasing even as buyer demand remains strong? After Thursday’s existing home sales report was released, economists explained that buyer demand in today’s housing market is not influenced so much by affordability as it is by housing inventory.
And according to a recent report from Trulia, Texas’ inventory shortages won’t be around much longer if the state keeps up its crazy-fast home-building pace, bringing relief from rapidly rising home prices.