Texas Housing Market Predictions For 2024: What’s Happening With Rates, Prices & Inventory?

The Texas real estate market is always on the move, and The Sales Team Realtors are here to share the latest real estate trends happening in both the Midland-Odessa and Johnson County markets. Even with today’s interest rates, there’s plenty to be optimistic about. From an increase in listings to shifting sales volume, let’s break down the need-to-know stats and trends for the current market.

 

Sales Volume

It’s time to face the facts: the real estate sales volume has decreased from an average of $3.4 million to $2.5 million over the last year. (That’s 27%!) This downturn marks the worst market conditions in terms of sales volume since the 1990s. 

However, there is a silver lining to this year’s market. Real estate experts, like Brian Buffini, are predicting a late-year surge in sales and expect 40% of 2024’s sales volume to occur in the final months of the year. This anticipated surge indicates a robust finish to the year, offering exciting opportunities for both buyers and sellers.

 

Interest Rates & Inflation

Inflation has accumulated to 20% over the past four years, but the market is beginning to show some resilience. Buyers are learning to adapt and continue to enter the market despite less-than-savory interest rates.

As for interest rate predictions, experts from Fannie Mae, the Mortgage Bankers Association, and the National Association of Realtors (NAR) predict that interest rates will end the year around 6.67%, with a slight decrease to 6.25% in 2025. 

Additionally, a single rate cut is anticipated between September and November, which could provide some relief to potential buyers.

 

Supply & Demand

First, let’s talk supply. Inventory levels are on the rise, with 36.7% more homes available on the market compared to last year, according to Realtor.com’s senior economist Ralph McLaughlin. This increase in inventory provides more options for buyers, making it an excellent time to explore the market and find the perfect home.

Demand remains high, driven by the ongoing housing shortage and rising rent prices. Persistent rent hikes continue to put pressure on current renters, with 22 million claiming their rent is 30% of their income—and 12 million claiming it’s 50% of their income.

With rental rates up 30% from 2020, many people are flocking to the market and continue to put pressure on listing inventory.

This high demand keeps the market vibrant and competitive, offering sellers the opportunity to get great value for their homes. For buyers, it’s important to consult with a real estate professional to help with quick decision-making and a proactive approach to securing your dream home.

 

Market Demographics 

The market demographics are shifting in an exciting way. In 2024, 31% of the buyer market consisted of first-time home buyers. Many people are getting assistance with their mortgage payments from family members, making homeownership much more attainable.

It’s also important to account for the 45.5 million millennials who are in the “household formation” age. More family-oriented millennials are beginning to shape the market, and this wave of young buyers is creating a vibrant and dynamic future for real estate.

 

NAR Update

The Sales Team Realtors understand that many of our clients are curious about how the NAR settlement will alter the upcoming housing market. So, let’s shed a little light on the situation.

What can buyers expect when it comes to agent compensation?

First things first, buyer agent commission has always been negotiable. That is something that has not changed, but where this conversation takes place is now up for debate. Buyer agent commission was typically stated on the MLS—and while listing advertising will still play a large part on the MLS, buyer agents are now expected to take these conversations offline.

This shift is an opportunity to enhance trust between real estate professionals and their clients. Agents are now encouraged to clearly present their value proposition, differentiate their professional skills, and ensure that compensation discussions are part of their client interactions. This emphasis on communication and trust-building sets the stage for stronger, more collaborative relationships in the industry.

For more information, you can visit NAR FAQs.

 

Navigating the real estate market today may seem daunting, but it’s brimming with potential. Staying updated and flexible is crucial for both buyers and sellers to make informed, strategic choices. 

If you have any questions about the current housing market, don’t hesitate to reach out to The Sales Team Realtors. We have a deep understanding of the local markets and are passionate about educating our community.