The Texas housing market’s rapid growth slowed significantly in first quarter 2014, while single-family home prices continued to increase and inventory reached a new low, according to the “Texas Quarterly Housing Report” released yesterday by the Texas Association of Realtors.

The report showed 55,322 single-family homes were sold in Texas in the first quarter, which is 1.92 percent more than the same quarter last year. The median price for Texas homes was $172,900, up 9.43 percent from last year. The average price increased 10.42 percent to $225,337.

Real Estate Center Research Economist Dr. Jim Gaines said, “It’s important to remember that Texas’ housing demand is still strong, being fueled by true economic, job and population growth. In addition, 2013 was the second best year for Texas real estate. We’re comparing current data to very strong historical figures, making year-over-year increases for 2014 much more modest.”

During the first quarter, the statewide inventory of homes decreased by 19.04 percent to 3.4 months, an all-time low for the state. Inventory is especially low in Texas’ four major metro areas, where even the metro with the highest inventory, San Antonio at 4.3 months, is still well below the 6.5 months that the Center cites as a balanced market.

“As cautioned in the fourth quarter 2013 report,” Gaines said, “continued inventory shortages have begun to inhibit sales volumes statewide. Housing development is on the rise again, but it will be some time before Texas sees the benefits of that activity. While housing demand shows no signs of declining, Texas will likely continue to see constrained home sales growth throughout the rest of the year, while home prices will continue to expand at double-digit rates.”

Source: Texas Association of Realtors