Houstonians might finally be fed up with the metro’s astronomical home prices.
Last month, the Houston Association of Realtors reported that the city’s average home price hit $440,670 — a 14.3 percent rise from last year. At the same time, the median price jumped 16 percent to $351,000. Both are records, according to the Houston Chronicle, and now home sales are slipping.
It’s no secret that it’s a seller’s market out there, but sky-high home prices and rising mortgage rates may have pushed demand to its limits. Sales slipped by about 1 percent in May compared to last year, the second straight month of decline, HAR reports. It seems prospective homebuyers are finally stepping back and waiting for the market to cool.
“We’re coming off a market that has been in hyperdrive ever since the pandemic started, and we knew that market couldn’t last forever. It had to level off at some point,” said Jennifer Wauhob, chair of HAR and an agent with Better Homes and Gardens Real Estate Gary Greene. “Conditions appear to be calming a bit across the Houston housing market, so we are not seeing the frenetic pace of buying we did a couple of months ago with dozens of competing offers on new listings.”
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As prices have spiraled upwards, homes under $250,000 in the Houston area seemed to have gone extinct, effectively shutting out most first-time buyers. In April, economists at the National Association of Realtors estimated that about 10 percent of Houston home buyers were priced out of the market as a result of rising mortgage rates.
Not all Houston buyers are deterred by mounting mortgage rates, however. Homes priced between $500,000 to just under $1 million are doing just fine. Sales of homes in this price range jumped 38 percent in May.
Indicators show a cooling of housing markets across the country. Nationally, homes going into contract last month saw the largest annual decline since the start of the pandemic, according to Redfin. Plus, Google searches for “homes for sale” dropped 10 percent nationally last month.
As for Houston, Wauhob is relatively optimistic, as new listings are up 9 percent to their highest level so far this year.
“Any increase [in inventory] is good for buyers. It means they can negotiate better terms if they’re not competing with 25 other people,” Wauhob said. “Hopefully we can begin to see signs of normalcy in terms of supply, demand and pricing in the months ahead.”
[Houston Chronicle] — Maddy Sperling