Texas' median home price climbs 18.6% to $325K in first quarter

The median home price in Texas climbed to $325,000 during the first quarter of this year – an 18.6% increase, according to a recent housing report.

The Texas Realtors' report measures activity in the state’s housing market and in local markets. Overall, it found that sales increased by more than 5.6% with 88,700 properties exchanging hands during the first quarter. At the same time, housing inventory continued to slip as active listings decreased by 8.2%. 

“The demand for Texas housing continued its rapid, upward trajectory during the first three months of 2022," Russell Berry, chairman of Texas Realtors, said in a statement. "We have tight levels of housing inventory but continued relocation activity to Texas—as well as plenty of existing Texans who want to change their housing situation for a variety of reasons.”

Texas’ low housing inventory levels have also caused the average time a home spends on the market to fall significantly in several local markets. 

The Waco metropolitan area saw its average time on market drop by 16 days when compared to the first quarter of 2021. This drop was even more pronounced in metro areas like Brownsville and College Station, which saw their average time on market fall by 25 days and 29 days, respectively. 

Dr. Jim Gaines, a research economist at Texas A&M University, said in an analysis of Texas’ housing market data that homebuyer sentiment may be reaching its peak as interest rates continue to rise. 

The combination of low inventory and rising mortgage rates could cause the market to slow down throughout the rest of the year, but Gaines said that potential moderation shouldn’t be mistaken for weakness in the market. 

“Although home sales statistics in the first quarter of 2022 don't appear as positive compared to the same quarter last year, the Texas real estate market is still very strong,” Gaines said.