Houston’s housing market in 2023 was a wild ride, with dizzying highs and nauseating lows.
The Space City experienced its second consecutive year of housing blues, but hopes remain high for a robust 2024, according to the Houston Association of Realtors.
Total dollar volume dropped nearly 13 percent to $40 billion for the year.
Single-family home sales took a 12 percent nosedive. About 83,850 single-family homes sold in Greater Houston last year, compared to 95,300 in 2022. Residential sales across the board plummeted from 117,800 to 102,370, down 13 percent year-over-year.
The summer brought some relief, as sales peaked in June, when about 8,720 homes sold, but the overall descent persisted.
“Rising mortgage rates were the primary deterrent to homebuying throughout 2023,” said Thomas Mouton, HAR chair.
Average 30-year fixed-rate mortgage rates scaled 23-year highs, reaching over 8 percent by October. The effect of mortgage rates on sales was evident as single-family prices remained flat. The average single-family home price remained stagnant, at around $413,000, between 2022 and 2023. The median sales price saw a 2.5 percent decline, hitting $330,000 in 2023, compared to $338,000 in 2022, but neither materialized into increased sales.
Houstonians instead flocked to the single-family rental market, opting to wait out interest rate hikes in hopes of securing a better deal in the new year.
As Houston dusts itself off from 2023, all eyes are on 2024. November brought a surprising 5 percent increase in home sales, offering a glimmer of hope for the new year. But then sales dipped 6 percent, year-over-year, in December, underscoring the housing market’s rollercoaster narrative.
December ended with an increased home supply of 3.3 months, up from last year’s 2.6-month inventory. Pending home sales also increased 14.5 percent increase year-over-year.
“We believe that home sales will pick up once consumer confidence is restored, and that depends on what the Federal Reserve does with interest rates and evidence that inflation is no longer a threat,” Mouton said. “The expanded housing inventory and moderation in pricing we saw throughout 2023 have created a positive buying landscape for 2024.”
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