On May 18, 2023, Texas Realtors released their 2023 Texas Homebuyers and Sellers Report. The report, detailing single family, owner occupied transaction data from July 2021 to June 2022, highlights the high price level of the Texas market. Although this time sample is prior to the majority of rate hikes that have served to cool the housing markets, the insights into housing affordability are still useful.
Marcus Phipps, 2023 Chairman of Texas Realtors, spoke to the residential agent readership that the report is geared toward:
The insights we provide every year with the annual Texas Homebuyers and Sellers Report are extremely valuable to Texas Realtors and their clients. The report equips Texas Realtors to best serve their clients' needs and allows all Texans to make informed real estate decisions.
Despite the report's focus on residential realtors, commercial real estate investors, especially those in self-storage or multifamily, can still use the data provided to their advantage.
- First-time homebuyers down to 24% from 32% the prior year and 39% 10 years ago
- Median household income of homebuyers was $110,000, a dramatic 25% ($22,000) more than the national average
- 13% of homes purchased were new construction, roughly in-line with the nation's average of 12%
- 52% of buyers were 55+, with only 14% being 25-34
This information points not only to the demand for new supply in the market, but also to the strong multifamily demand. The majority of Texans are under 55 yet still need homes, pointing toward a resilient housing market. Additionally, the high median income for homebuyers further points to a housing affordability crisis that can only be solved with new development to bring more supply to market, be it single family or multifamily (preferably both).
While rising interest rates have served to cool the housing market, that does not help the affordability issue: lower prices due to higher mortgage rates do not help to make homes more affordable to the average person.
It is worth noting that new construction is still happening at a strong rate, helping to add this supply and work toward solving affordability. Homebuilders, please rejoice in the fact that you are enabling the American dream as you plan your subdevelopments.