Texas housing market ‘a tale of two economies’ says Dallas Fed economist

Video: Dallas Fed’s Laila Assanie also says sluggish economic growth ahead for Texas
For immediate release: June 16, 2016

DALLAS—Home prices in the Austin, Dallas–Fort Worth and San Antonio metro areas are at record highs, but the housing market in Houston is weakening, said Federal Reserve Bank of Dallas economist Laila Assanie in the Bank’s latest Texas Economic Update video.

“The housing market statewide can be described in five words: a tale of two economies,” Assanie said. “Activity along the I-35 corridor—namely in Austin, San Antonio and Dallas–Fort Worth—continues to be pretty strong … the weak spot is Houston, and that is because of the energy bust.”

Houston saw a dip in home prices during the first quarter of 2016, according to data from the Federal Housing Finance Agency, the first decline since third quarter 2011, when the U.S. housing market was still recovering from the housing bust, Assanie noted.

Although the multifamily housing market is also showing strength along the I-35 corridor, statewide multifamily housing permits have slowed, Assanie finds.

“That might be a good thing for Texas, because we have been doing a lot of apartment building over the last several years, so this pullback will help stabilize things in the market,” Assanie said.

The overall Texas economy presents a “befuddled picture,” because economic data over the past few months have been mixed, Assanie stated.

“Recent economic data have been varied but overall indicate continued sluggish growth in the Texas economy,” Assanie said.

The Dallas Fed’s Texas Employment Forecast stands at 1.3 percent for 2016, suggesting 155,700 jobs will be added in the state this year. A decline in oil prices from current levels or a slowdown in the U.S. economy are risks to the forecast, according to Assanie.

Assanie is a business economist at the Dallas Fed.

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Media contact:
Jennifer Chamberlain
Federal Reserve Bank of Dallas
Phone: (214) 922-6748
Email: Jennifer.Chamberlain@dal.frb.org