The Texas economy continued to grow in May, but there are signs of deceleration ahead, including a cooling housing market, according to the Federal Reserve Bank of Dallas’ latest Texas Economic Update.
Texas employment grew at an annualized rate of 6.2 percent in May, which was faster than the 5.2 percent increase in April. However, service sector growth slowed, manufacturing demand eased and expected timelines for supply chains returning to normal lengthened. Texas existing-home sales flattened out in April and have been declining from May through mid-June, according to weekly data from national real estate brokerage Redfin.
“The housing market is cooling down, particularly at the entry level due to the recent spike in mortgage rates and record-high prices,” Laila Assanie, senior business economist at the Federal Reserve Bank of Dallas, said.
The rapid pace of home price increases is showing signs of ebbing as bids are falling more in line with asking prices, and builders have been holding base prices steady in recent weeks, according to the report.
“On the new-home side, buyer traffic has been disappointing, cancellations are up, conversions are taking longer, waiting lists are shrinking and incentives are being re-introduced to stimulate sales,” Assanie said.
