|Research 'roundtable': The economy will remain positive in 2019, but . . .||Research 'roundtable': The economy will remain positive in 2019, but . . .||Bryan Pope||Pope||2019-02-14T06:00:00Z||Center News|
The Real Estate Center’s research team had its monthly pow-wow earlier this week. Naturally, much of the discussion focused on what to expect from the Texas economy this year. Overall, the outlook is generally positive but with a caveat.
Center Chief Economist Dr. Jim Gaines said the economy should continue to see growth but at a slower rate than the state has experienced in recent years.
“Texas is doing pretty good, but I think we’re going to see a slowdown across all Texas markets, including employment levels,” he said, adding that the economy will still remain positive. Meanwhile, at the national level, he said GDP growth could reach its highest level of the last six years.
Other takeaways from the discussion:
- At the Texas Realtors’ winter meeting, National Association of Realtors Chief Economist Lawrence Yun said interest rates won’t do much this year. They’ll probably stay in the low 5 percent range. Yun said housing affordability will continue to be a big issue for the U.S.
- Meanwhile, in Texas, home price growth is slowing. However, the median square footage in Texas homes has been dropping, which means smaller homes are on the market and could be a factor in declining sales prices.
- Capital investment may decline this year as businesses choose to pay down debt in a slowing economy rather than start new projects, said Center Research Data Scientist Gerald Klassen.
- Activity in the state’s energy sector will be neutral, Dr. Gaines said, with oil prices neither rising nor dropping significantly but staying around $50/barrel. Research Economist Dr. Harold Hunt pointed to a survey from the Federal Reserve in which 29 percent of executives from 160 oil and gas firms said they expect prices to rise to between $60 and $65.
- Mining and logging remained the state’s top industry in December 2018, said Research Economist Dr. Ali Anari. That sector created over 40,000 new jobs year over year.
For more 2019 projections from the REC research staff, read our 2019 Texas Housing & Economic Outlook report, now online.