The Texas housing market closed out 2014 with one of the highest fourth-quarter single-family home sales volumes in Texas real estate history, according to a release from the Texas Association of Realtors.

Texas housing has second best year in 2014

James Gaines, Texas A&M economist.

“A dip in mortgage interest rates below four percent in the last half of 2014 created an ideal climate for this year-end surge in home sales growth. However, fewer homes on the market and strong demand maintained rising home prices and shrinking months inventory,” Jim Gaines, Ph.D., economist with the Real Estate Center at Texas A&M University, said in the release.

“Texas home sales in the first half of 2015 are expected to be similar to what we’ve seen in 2014, but continued increases in home prices and record-low inventory levels should still continue,” cautioned Gaines. “Historically, Texas home prices have only risen 4.5 percent year-over-year. Continued housing demand, especially in Texas’ metro areas, will be critical to sustaining our market’s strong housing development in 2015.”
Ending a year-long trend of flat annual home sales growth, the year-end increase in home sales made 2014 the second-best year ever for Texas real estate.

8 percent increase in Texas single-family home sales in fourth quarter

“While many local Texas markets saw dips in home sales volume throughout 2014, the statewide housing market continued to grow year-over-year,” Scott Kesner, chairman of the Texas Association of Realtors, said in the release. “The fourth quarter of 2014 marked three-and-a-half years of continual home sales growth for the Lone Star State and the highest annual home sales volume since 2006 – a testament to the strong and enduring demand of Texas real estate.”

According to the 2014-Q4 Texas Quarterly Housing Report, 66,664 single-family homes were sold in Texas in the fourth quarter of 2014, an 8.46 percent increase from the same quarter of 2013. This is significantly higher than the zero percent to two percent year-over-year increases in single-family home sales seen throughout the first three quarters of 2014.

Texas home prices continued to climb year-over-year in Q4-2014, but at a slower pace than the nearly 10 percent annual increases seen throughout the last two years. In 2014-Q4, the median price for Texas homes was $185,900, a 7.76 percent increase from 2013-Q4, and the average price increased 6.99 percent to $240,976.

The second half of 2014 saw an end to the double-digit quarterly drops in housing inventory that have occurred since summer 2011, but still did not prevent Texas housing inventory from hitting an all-time low of 3.3 months in 2014-Q4, a decrease of 8.33 percent from one year prior. That figure is nearly half the 6.5 months that the Real Estate Center at Texas A&M University cites as a market balanced between supply and demand.

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