US Housing Market Shows Signs of Spring Recovery, But Texas Cities Lag Behind
Realtors, homeowners, economists, and Americans across the nation are collectively breathing a sigh of relief as the latest housing data for February rolls in. According to a comprehensive report from Zillow, there is renewed hope for the United States housing market after a prolonged period of stagnation.
A National Uptick in Activity and Confidence
A significant spike in housing activity suggests the market is regaining confidence and perking up as Spring approaches. Home values increased in February for the first time in seven months, marking a pivotal shift. Existing home sales rose by 1.8 percent compared with a year earlier, indicating a robust recovery from January's weaker numbers, which were likely affected by severe winter weather disruptions.
Lower mortgage rates have played a crucial role in boosting purchasing power. Over the past year, they have increased affordability by roughly $30,000 for a median-income household. Consequently, the typical mortgage payment—excluding taxes and insurance—has fallen by 7.7 percent year over year. These developments collectively offer an early sign that the housing market may be beginning to recover after hovering near its low point since 2023.
Texas Metros Face Persistent Challenges
However, the bigger picture does not reflect the reality of many of America's biggest cities, with some not experiencing the same spark felt on a national level. Of the 50 largest metropolitan areas, only seven saw month-over-month home value declines. Yet, the cities that did see drops paint a very clear picture: Texas is in trouble.
Houston, San Antonio, and Austin all experienced month-over-month declines—a bleak sign for a state that has been struggling to rally after its post-pandemic housing hangover. All three cities became hotspots for transplants during Covid, as people moved to places with favourable weather and less gruelling taxes. Builders responded by developing properties to meet the soaring demand, but now, the hype has died down. These Texan metros now have too many homes and not enough buyers, leading to an oversupply issue.
Austin has been hit especially hard. As of January, it was the strongest buyer's market in the country, meaning it had the biggest imbalance between supply and demand, leaving sellers with virtually no power. The other four metros rounding out the list of cities seeing home value drops in February were Pittsburgh, Las Vegas, Nashville, and Buffalo. Dallas remained flat, as did Miami and Orlando—two Florida cities that experienced similar pandemic-driven booms in their housing markets.
Market Dynamics and Future Outlook
Elsewhere in the data, new listings declined by 3 percent year over year in February, likely reflecting continued disruptions from winter storms. Housing inventory continues to slowly build, with about 1.12 million homes on the market nationwide in February. This represents a 5 percent increase from a year earlier and is slightly higher than January levels.
Home sales also strengthened during the month. Approximately 239,910 homes were sold in February—up 1.8 percent from a year earlier and 13 percent higher than in January. Newly pending listings, which track homes that went under contract during the month, rose by 3.5 percent compared with last year and jumped 11.1 percent from January, another sign of improving market activity.
Competition among buyers has cooled somewhat compared with last year but remains solid. Homes spent a median of 28 days on the market before going under contract in February—four days longer than a year earlier but much faster than January. If mortgage rates remain below 6 percent for an extended period, it could provide a psychological lift that encourages more buyers and sellers to reenter the market, potentially sustaining the recovery momentum into the warmer months.
