Housing in the Lone Star State heated up in the final quarter of 2014, capping off the second-best year for the market in the state's history, according to data released by a local Realtor group.
Using data from multiple listing services in markets throughout the state, the Texas Association of Realtors reported Monday that single-family home sales statewide totaled 66,664 last quarter, an 8.46 percent increase from the same period in 2013.
"While many local Texas markets saw dips in home sales volume throughout 2014, the statewide housing market continue to grow year-over-year," said Scott Kesner, association chairman. "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."
The increase marks a sharp turn from 2014's other three quarters, which generally saw 0–2 percent increases on an annual basis.
"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," said Jim Gaines, Ph.D., economist with Texas A&M University's Real Estate Center. "However, fewer homes on the market and strong demand maintained rising home prices and shrinking months inventory."
The group says the median price for a home in the state last quarter was $185,900, a 7.76 percent increase from the prior three months. The average price was up 6.99 percent, meanwhile, to $240,976.
At the same time, the statewide stock of for-sale homes continued to fall, dragging months' supply to an all-time low of 3.3 months, about half the supply that Texas A&M's Real Estate Center says is a balanced market of supply and demand.
Still, inventory trends are looking better than they were just a few short years ago, when quarterly drops were in the double digits.
Looking ahead, Gaines said he expects home sales in the first half of this year will be similar to what the market saw last year, while prices and inventory are projected to continue moving along their current trend lines.
"Continued housing demand, especially in Texas' metro areas, will be critical to sustaining our market's strong housing development in 2015," he added.