With the end of the hurricane season in the rearview mirror, the Texas real property market has become a hot topic.
On Tuesday, the U.S. Department of Housing and Urban Development released its latest estimate of the state’s home values, which showed that prices were down 2.5% over the last year.
That is below the national average of about 4%.
Texas real estate values are a little more volatile than other major markets, though.
The state’s housing market has been hit by the foreclosure crisis, as foreclosures have pushed prices higher and led to more foreclosing, according to a Bloomberg analysis.
But if the state had avoided the foreclosure issue, the state could have had a much more stable housing market, said Chris Nance, chief economist at TD Ameritrade.
That would have prevented many homeowners from making the jump to a more expensive rental market, he said.
“It’s a lot harder for a homebuyer to get into a more desirable rental market than it is to get out of the housing market,” Nance said.
“And that can be a negative for the value of a home, so I think there’s definitely a correlation between that and prices.”
In general, Texas has one of the lowest home values in the country.
But Nance thinks that may change if the current housing market continues to improve.
Census Bureau projects that Texas will be home to a record number of households with incomes below $50,000 by 2033, according in its report on the state of the U, released Tuesday.
The median household income for households earning $50 and less is expected to jump to $71,922, the bureau projects.
That’s a 6.6% increase over last year, according the report.
The price index for home purchases was up 7.7% in the month of July compared to a year ago, according Nance.
The Texas home market is a big seller in Austin, the city with the most number of sales in the state, according a Bloomberg survey of local real estate agents.
In the past year, the Austin market has seen prices drop 6.2% in comparison to the national median home price, according Bloomberg.