Houston’s residential real estate market slumped in September, amid increasing supply and high mortgage rates that are keeping potential buyers on the fence.
Home sales in Houston dropped by nearly 11 percent last month year-over-year, the Houston Chronicle reported, citing a report from Houston Association of Realtors.
The decline marks a consistent trend, as home sales have fallen for the past 18 consecutive months.
Effects of this protracted slump are evident in the average home price, which remained relatively flat at $416,700, an increase of less than 1 percent compared to the previous year. The median home price, in contrast, dipped by 2 percent resting at $333,000.
The declining trend in home sales transcended market segments. All price ranges over $100,000 saw modest decreases in sales. Even the luxury market, which saw an impressive 21 percent increase the prior month, dipped 4.5 percent year-over-year in September.
Homes stayed on the market for an average of 45 days, compared to 37 days a year earlier, reflecting a slowdown in buyer activity.
“September was a rather lackluster month on the sale side of Houston real estate … we probably won’t see much improvement, as this is traditionally a slow time of year for our industry,” HAR chairwoman Cathy Treviño, HAR told the outlet.
The number of homes available for sale in Houston continues to rise, reaching a new peak of 3.5 months of supply, indicating the time it would take to sell all of the properties at the current sales pace. This level of inventory hasn’t been seen since November 2019, when supply reached 3.6 months.
The National Association of Realtors suggests standard supply for a balanced market is three months; the Bayou City’s slightly elevated numbers indicate a marginal seller’s market.
Despite this dip in home prices, prospective buyers are hesitant due to higher mortgage rates. The average 30-year fixed-rate mortgage skyrocketed to 7.49 percent last week, reaching a 23-year high, according to data from Freddie Mac.
Mortgage applications for 30-year fixed loans have plummeted to multi-decade lows, according to data from the Mortgage Bankers Association, underscoring the difficulties potential homebuyers face. Comparatively, two years ago the average mortgage rate hovered just under 3 percent.
— Brandon Sams
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