With the spring and summer homebuying season kicking off, Texas has the tightest housing supply in almost three decades.
In February there was only a 3.4-month supply of new and preowned houses listed for sale across the state – the lowest inventory in 28 years, according to a new report from the Real Estate Center at Texas A&M University.
"Existing homes have been in short supply for a while," Real Estate Center research economist Dr. Luis Torres said in the report. "The big difference is now the shortage of new homes is more pronounced."
The supply of homes available for purchase is even tighter in North Texas.
In February, there was only a 2.7-month inventory of preowned single-family homes listed for sale with real estate agents.
And there was a 2.2-month inventory of completed but vacant new houses available in the Dallas-Fort Wroth area at the start of 2018.
A balanced home market is considered to have a 6-month supply of available homes.
While D-FW was the top homebuilding market in the country in 2017 with more than 30,000 starts; home demand in North Texas and around the state is outstripping new supply.
Statewide, new-home permits were down 2.6 percent in February, according to the Real Estate Center.
And new home construction in Texas is more than a third below where it was before the Great Recession.
"Building permits peaked in 2007, and they’ve never come back," Torres said.
Texas builders have been constrained by a lack of labor, a shortage of affordable building sites and new building regulations.
"The lack of land available for development has hurt new-home construction," he said. "There’s a small supply of land for building new homes, and demand is high. That pushes up land prices and makes it more costly to build a new home."
Torres said new U.S. tariffs on Canadian lumber are also adding to home construction costs.
The number of preowned homes for sale in North Texas has increased about 6 percent so far in 2018 compared to 2017.
But most of the inventory gain has been in higher-cost houses. More affordable homes priced below the median price of $250,000 are increasingly in shorter supply.
In 2017 real estate agents sold a record of more than 106,000 preowned single-family homes in North Texas – more than any other major metro area.
Median home sales prices last year rose by 9 percent to a record high – in large part due to the shortage of available houses.
Texas home inventories have been falling since 2011.