Are home prices in Texas dropping or rising?

Texas housing prices were rising for years, until very recently. In January 2020, the median home sale price was $233,000, according to the Texas Real Estate Research Center. By mid-2022, median prices reached a peak of $360,000. They have since slowly ticked down, and as of November 2022, the state’s median sale price was $330,000.

Where are the hottest real estate markets in Texas?

The Austin–Round Rock metro area has been on fire in recent years. It grew exponentially during the pandemic, and though its growth has slowed in recent months, it still has the highest median home sale price in the state. In the past year, the areas with the largest increases in median home sale price include Sherman-Denison (18.1 percent), Tyler (17.7 percent) and Killeen-Temple (17 percent), according to Texas Realtors.

What are some affordable places to live in Texas?

In the Lone Star State, housing and other cost-of-living expenses are cheaper than the national average. There are plenty of affordable places to live, especially if you’re looking in rural areas or outside of the big cities. For instance, the median sale price of a home in Wichita Falls, near the Oklahoma border, is just $186,000, according to Texas Realtors. In Texarkana, bordering Arkansas, the price is $211,000. And in Beaumont–Port Arthur, in the state’s southeast near Louisiana, it’s $218,000.

Texas housing market: Everything you need to know

Written by

Taylor Freitas,

Edited by

Michele Petry

Published on October 06, 2023 | 5 min read

Bankrate is always editorially independent. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . Our is to ensure everything we publish is objective, accurate and trustworthy.

A boy looks toward the skyline in Houston, TX

Texas, the country’s second-most populous state, is a top destination for people seeking an affordable cost of living and below-average housing prices. The mild winters and lack of state income tax don’t hurt, either. In fact, Texas has led moving giant U-Haul’s list of growth states for the past two years in a row — it’s the number one destination for the company’s one-way truck rentals. And two Texas cities, Round Rock and Arlington, made Bankrate’s most recent list of best places to live in the U.S.

However, rising mortgage rates and slowing home sales are affecting homebuyers and sellers all across the country, including the Lone Star State. Here’s what you need to know before jumping into the Texas housing market.

Texas housing market overview

Because Texas is such a big state, housing trends and prices vary quite a bit depending on the city and region. For example, according to Redfin data, the median home price in popular Austin — where the tech industry has been expanding rapidly — is $554,500, which is high but a decline from last year. That’s more than double the price in a less buzzy town like Amarillo, where the median is just $230,000, but prices there are rising. The statewide median price falls somewhere in-between, and has stayed relatively flat year-over-year.

Texas market trends and stats

According to August 2023 Redfin data, the median home price across the state was $351,500. That’s a very slight 0.4 percent increase from August 2022, but still quite a bit cheaper than the current national median price of $407,100.
Redfin data also reveals that the number of homes for sale in the state was up 1.2 percent year-over-year, but even so there was only a three-month supply of inventory. That’s still short of the five or six months needed for a balanced market, despite the small increase.
The state’s median days on market figure remained the same from last year to this year: a relatively slow 37 days.
The sale-to-list ratio in August was 97.8 percent, meaning homes tended to sell for around 2 percent less than full list price.
According to data from CoreLogic’s ClosingCorp, Texas closing costs average 1.5 percent of the home’s sale price. For a median-priced $351,500 home, that’s $5,272.50.

Should you buy or sell in the Texas housing market?

Whether you’re thinking about buying or selling in Texas, it’s important to understand the current housing market and how it might affect you.

If you’re a home seller

For those hoping to sell a home in Texas, several facets of the market are on your side. Demand remains high, there’s not enough supply to meet it, and prices are up year-over-year (albeit slightly) — all signs of a seller’s market.

However, since mortgage interest rates are quite high right now, many buyers won’t be able to spend as much on a house. It’s smart to be aware of just how much your home is worth, and be mindful when choosing a listing price. A real estate agent who knows your specific area in Texas can be a big help with this.

If you’re a homebuyer

For Texas buyers, there’s both good news and bad news. Unfortunately, with today’s steep mortgage rates, you might not be able to afford as big a purchase as you would have a year ago. On the positive side, though, prices in Texas are relatively affordable, and if you decide to purchase a home now, you’ll likely face less competition, as many buyers have decided to hold off.

Just make sure you have a good grasp on your finances before you dive into the market. Bankrate’s calculator can help you determine how much house you can afford, and be sure to get preapproved for a mortgage before you start your house hunt. Preapproval helps you understand how much a lender is willing to loan you, so you can keep to a realistic budget more easily.

Texas housing market predictions

With stubbornly high mortgage rates and an uncertain economic outlook, it’s easy to understand why some people are worried. Will there be a housing crash? Fortunately, national experts don’t think so. And local experts here agree. In a recent report, Texas A&M University’s Texas Real Estate Research Center described the state’s market as “cooling,” not crashing, and noted that, while existing home sales may be declining, new construction is on the rise and price gains are modest, but “steady.”

Find a Texas real estate agent

Working with an experienced local real estate agent is one of the best ways to get insight into the Texas housing market. Agents know their market inside-out and can guide you through the buying or selling process, help you avoid common mistakes and streamline the time-consuming logistics of a home sale or purchase.

Before hiring a real estate professional, make sure to inquire about their experience, working style, past client successes and anything else that’s important to you. Ideally, you want to find someone you like and trust. Treat it like a job interview — and don’t be afraid to ask questions.

FAQs

They are rising, but only slightly. According to data from Redfin, Texas’s median home price in August 2023 was up 0.4 percent year-over-year.
The Austin–Round Rock metro area has been on fire in recent years. It grew exponentially during the pandemic, and though its growth has slowed recently, it still has the highest median home sale price in the state at $470,000, according to the most recent data from Texas Realtors. Round Rock was named the number one best place to live in the entire country in Bankrate’s most recent rankings.
There are plenty of affordable places to live in the Lone Star State, especially if you’re looking outside of the big cities. For instance, according to Q2 2023 data from Texas Realtors, the areas of Beaumont-Port Arthur, Abilene and Texarkana all have median prices of $225,000 or less, and in Wichita Falls, it’s just $199,375.