Last month, home sales experienced their most significant decrease since the pandemic lockdowns in spring, as high prices and higher mortgage rates excluded buyers from the market. This is a clear indication that the Houston housing market is undergoing a shift. It is still a seller's market, but buyers are beginning to gain some bargaining power. Inventories are increasing, homes are staying on the market longer, and price increases are moderating.
Mortgage interest rates, which averaged 5.8 percent for a 30-year fixed-rate mortgage in June, dropped just below 5 percent last week, according to the weekly survey by the government-sponsored mortgage financing company Freddie Mac. Rates started the year at around 3 percent. Christopher Johns, a Redfin agent who sells homes in the Katy, Richmond and Sugar Land areas, said the market has begun to normalize as interest rates stabilize and buyers and sellers adjust expectations. As the market corrects, sellers may have to lower their prices slightly.
Open Houses have returned to normal with perhaps half a dozen groups on tour. Katherine Feser covers a variety of topics for the business section of the Houston Chronicle. She coordinates some of the newspaper's most popular special sections, such as Chronicle 100, Home Price Survey and Top Workplaces. It compiles many of the basic elements of the section, including the daily markets page, People in Business, event listings, and real estate transactions.
The combination of high home prices and mortgage rates makes it difficult for many first-time buyers to afford a home. Right now, inventory in the greater Houston area is increasing, so buyers could benefit from waiting for more properties to be listed. While homes spend more time on the market this fall than during the summer, prices are still high, so sellers continue to have an advantage. People living in more expensive cities have flocked to cheaper cities like Houston, Texas.
Zillow's home price forecast for Houston, Harris County and Houston: The Woodlands-Sugar Land shows that while the cost of living in El Paso is lower than the national average, housing costs are well below those of other major metropolitan areas such as Houston and Austin. The Houston metropolitan area offers great opportunities for investors looking for a stable market that offers both cash flow and stock growth at a price that is still well below its replacement value. Inventory has increased and according to the Houston Association of Realtors, the price of single-family homes fell nearly 17% in August compared to the same time last year. Even though housing prices in Houston have reached new levels, the market remains attractive to residential real estate investors.
The Houston market hasn't exploded as dramatically as other metropolitan areas have and therefore is less likely to fall into free fall. Once you decide to buy or sell a home in the Houston area, it's wise to enlist the help of an experienced real estate agent. El Paso's strong employment growth, affordability, low vacancy rates and high population of young households were critical to its classification process. On the other hand, single-family home prices are still relatively high and inventory is limited, especially in desirable neighborhoods.