Texas new home market sales increase, buyers being offered incentives

HOUSTON - The housing market has been on a climb recently and even more people are seemingly noticing this new trend and putting in their down payments.

In a new release from HomesUSA.com, new home market sales in Texas climbed in March compared to February with the 3-month moving in March being 4,903 compared to 4,585 new homes sold in February.

This was said to be the highest reported Multiple Listing Services (MLS) total monthly sales in more than two years. MLS data is used by HomesUSA.com New Home Sales Report and is the most accurate information available from the Relator Associations of North Texas, Houston, Austin, and San Antonio.

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Ben Caballero, the nation’s top-ranked real estate agent, and HomesUSA.com CEO said much of the new home sales came from builders listing homes previously sold from a waiting list when the inventory was tight.

Many home buyers canceled their purchases after interest rates increased because they could no longer qualify for the homes, causing the housing market inventory to increase.

Those previously sold homes were then listed in the local MLS by builders, such as companies like Perry Homes and Highland Homes, which were reflected in the recent month's data. 

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"So what we're seeing now is, you know, obviously, with interest rates rising, a lot of the consumers are challenged, and they're scared, because of the affordability that goes with that. But the builders have been on the forefront of that," says Syed Mubashir with M&M Realty. "They've been providing incentives and interest rates by downs, which is really helping the buyers still purchase homes, or new construction properties." 

"And that really is one of the reasons that a lot of people are choosing to buy new construction homes," he continued. "And so you know, that they can buy their rates down, and still be able to afford their payments."

There was also an increase in the Days on Market (DOM) for new homes in March as the HomesUSA.com New Home Sales Index showed the 3-month moving average for DOM in the four largest markets in Texas reached 99.54 days in March compared to 92.15 days in February. Last year, the DOM averaged 59.02 days which was significantly lower compared to the DOM this year.

This change is because "supply and demand is becoming more balanced."

 "Texas new home sales are tenacious," Caballero stated in the release. "Despite the gyrations in mortgage rates, the market is finding balance in Houston, Dallas-Ft. Worth, Austin, and San Antonio."

The HomesUSA CEO also said the 3-month moving average for Texas new home prices has softened. The new home sales prices in Texas cumulatively were $449,603 in March versus $453,104 in February. Sales prices were relatively flat in March in Houston with $403,897 compared to $405,019 in February.

Many builders are working with lenders to provide buyers with incentives to use the money towards improving their homes or buying their rates down. Mubashir gives an example of interest rates being around 6.5 percent and builders giving them $10,000. So, now buyers can use the money to bring the rate down from 6.5 to 5 and still be able to buy the home.

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"I really think that because there's such crazy incentives out there. And you know, buyers really can take advantage of those, they really don't need to wait. Because we don't know which way the rates will fluctuate," Mubashir says. "So I mean, definitely, I recommend if somebody's in the market to buy a home, to take advantage of these incentives that the builders are offering."

Recent data from MLSs also show the market is growing more balanced with active listings of new homes slightly lower than last month. The 3-month average of active listings in Texas’ four largest markets for March was 27,426 and 28,127 in February. 

Pending new home sales reported to the MLSs in Texas, again jumped last month once again to their highest level in more than 12 months.

The 3-month moving average of new home sales in March was 6,798 versus 5,990 in February, stated HomesUSA.com in their report.

To read the full press release from HomesUSA.com, click here.