San Antonio Wage Growth Lags US by 2 Points, Housing Oversupply

The housing data confirms that San Antonio’s overheated market from 2020–2022 has cooled decisively.

Existing-Home Sales Rise, Median Price Falls

Existing-home sales rose at an annualized 1.5 percent month over month in April and were up 2.3 percent from a year ago. The median sales price declined 1.3 percent month over month and was 0.4 percent lower than a year earlier. Price weakness alongside rising sales volume points to lower-priced inventory entering the market rather than genuine demand improvement.

The months’ supply of existing homes climbed to 6.3 months, well above the 5.3-month supply in Texas. A six-month supply is generally considered balanced, in a market that had been undersupplied for years this signals a shift toward buyer leverage.

Apartment Rents Extend Multi-Year Decline

San Antonio apartment rents fell 3.3 percent year over year in April, while Texas rents declined 1.8 percent and national rents rose 1.0 percent. Monthly, rents dropped at an annualized 5.5 percent. Rent levels in San Antonio ($1,240) remain far below the state ($1,420) and national ($1,770) averages. The steady decline – now in its third year – reflects aggressive multifamily construction that has overshot demand in the post-pandemic migration environment.

The table shows that San Antonio’s labor market is not generating the wage pressure that would normally support housing demand. The combination of weak wage growth, rising unemployment, and rising housing supply suggests the regional economy is moving below trend.

Transmission to Rates and Risk Assets

For traders, the San Antonio data is one more data point in the story of a US economy that is cooling unevenly. The national labor market remains tight by historical standards, regional divergences are widening. The South, which led the post-COVID recovery, is now showing signs of fatigue.

The wage growth gap between San Antonio and the US means that inflation measures weighted toward the South will be softer. This could show up in the Atlanta Fed’s Wage Growth Tracker or in regional CPI sub-indexes. If more metros follow this pattern, the Fed may see a path to cutting rates without reigniting inflation in the regions that matter most for housing and services costs.

Risk to watch: If the national labor market stays hot while regional data like San Antonio’s remains soft, the Fed could be forced into a contradictory stance – keeping rates high to cool a few tight urban centers while ignoring broad softness elsewhere. That scenario would pressure residential real estate and consumer discretionary sectors exposed to the South.

For ongoing tracking of such regional divergences, see AlphaScala’s market analysis page.

The next scheduled data point for San Antonio will come with the May employment and housing reports, due in mid-June. The key levels to watch are whether payroll growth picks back up above 2% annualized and whether the unemployment rate ticks above 4.5%. A breach of either would confirm that the cooling trend is accelerating, not just seasonal noise.