Houston home sales fall for 14th straight month - Houston Chronicle
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The Houston Association of Realtors says single-family home sales fell 10.4 percent year over year in May amid high interest rates and home prices.
Houston home shoppers are finding more options on the market as relatively high prices and interest rates again slowed sales by double-digits in May.
Single-family home sales fell by 10.4 percent to 8,637 in May, down from 9,641 sales the year earlier, according to the Houston Association of Realtors' monthly report. It was the 14th straight month of year-over-year declines, but the smallest percentage drop in a nearly a year, according to the association, adding that it signals the worst of the housing sales slowdown could be over if mortgage rates don't rise further.
The sales volume is an improvement from a year-over-year drop of 19 percent in April and a nearly 30 percent decline in January. It is just 1.3 percent below the volume in May 2019, prior to the pandemic that kicked off a buying frenzy fueled by sub 3 percent mortgage rates and a desire for better houses with room for the family to work and learn from home.
Q&A: HAR chief Bob Hale opens up on 50-year career transforming homebuying in Houston
“Houston housing has been in negative territory for 14 months, however this latest report showed a notable easing in declines and may be a bellwether of improving market conditions ahead,” HAR Chair Cathy Treviño said in an announcement. "Unfortunately, there still are looming influences out there that remain out of our control, including interest rates, a possible deepening of inflation or a drift toward recession. Any one of those could slam the brakes on home sales.”
Sales trends
What's selling
Home prices, which soared to record highs before mortgage rates more than doubled in 2022 to rise above 7 percent last fall, fell for the fourth straight month in May. The median home price dropped 3.1 percent over the year to $340,095 in May, or nearly $14,000 less than the record set in June 2022. The median home price is 36 percent higher than the $250,000 registered in May 2019, according to HAR.
The average price, meanwhile, fell by 1.6 percent to $431,378 in May, or nearly $7,000 less than the May 2022 record.
The drop in sales means there's more on the market, welcome news for buyers in a competitive market that still favors sellers. The number of active single-family listings reached 20,097 in May, up from 13,445 in May 2022, according to HAR.
The supply of homes rose to 2.8 months inventory, the amount of time it would take to sell everything on the market at the current pace. It was an improvement from 1.5 months in May 2022 and the historic low of just over 1 month in March 2022. A four-to-six month supply is considered a balanced market.
"Low inventory continues to be the state of the market," said Dan McCarver, a real estate agent with Better Homes and Gardens Real Estate Gary Greene - Bay Area/Clear Lake. "You get a rush of showings when you put a property on the market. There are definitely buyers out there. I think they've reconciled themselves to the higher interest rates."
McCarver said he has seen an increase in cash buyers and the use of adjustable rate mortgages from buyers hoping for lower rates in the future.
Sharilyn Schuh, executive vice president of business development at Select Title in Sugar Land, said the market has picked up since a super slow January as buyers accept higher interest rates and realize 2 percent to 3 percent interest rates are not coming back.
“People are still moving here,” she said, noting that inventory has improved and Houston is still creating jobs that draw people to the market.
Homes are taking longer to sell, staying on the market an average of 48 days in May, up from 30 days in May 2022 and nearly a week faster than the pre-pandemic level in May 2019, according to HAR.
katherine.feser@houstonchronicle.com
Katherine Feser covers a variety of subjects for the Houston Chronicle Business section. She coordinates some of the paper's most popular special sections, including the Chronicle 100, Home Price Survey, and Top Workplaces. She compiles many of the staples of the section, including the daily markets page, People in Business, event listings and real estate transactions.
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Houston home shoppers are finding more options on the market as relatively high prices and interest rates again slowed sales by double-digits in May.
Single-family home sales fell by 10.4 percent to 8,637 in May, down from 9,641 sales the year earlier, according to the Houston Association of Realtors' monthly report. It was the 14th straight month of year-over-year declines, but the smallest percentage drop in a nearly a year, according to the association, adding that it signals the worst of the housing sales slowdown could be over if mortgage rates don't rise further.
The sales volume is an improvement from a year-over-year drop of 19 percent in April and a nearly 30 percent decline in January. It is just 1.3 percent below the volume in May 2019, prior to the pandemic that kicked off a buying frenzy fueled by sub 3 percent mortgage rates and a desire for better houses with room for the family to work and learn from home.
Q&A: HAR chief Bob Hale opens up on 50-year career transforming homebuying in Houston
“Houston housing has been in negative territory for 14 months, however this latest report showed a notable easing in declines and may be a bellwether of improving market conditions ahead,” HAR Chair Cathy Treviño said in an announcement. "Unfortunately, there still are looming influences out there that remain out of our control, including interest rates, a possible deepening of inflation or a drift toward recession. Any one of those could slam the brakes on home sales.”
Sales trends
What's selling
Home prices, which soared to record highs before mortgage rates more than doubled in 2022 to rise above 7 percent last fall, fell for the fourth straight month in May. The median home price dropped 3.1 percent over the year to $340,095 in May, or nearly $14,000 less than the record set in June 2022. The median home price is 36 percent higher than the $250,000 registered in May 2019, according to HAR.
The average price, meanwhile, fell by 1.6 percent to $431,378 in May, or nearly $7,000 less than the May 2022 record.
The drop in sales means there's more on the market, welcome news for buyers in a competitive market that still favors sellers. The number of active single-family listings reached 20,097 in May, up from 13,445 in May 2022, according to HAR.
The supply of homes rose to 2.8 months inventory, the amount of time it would take to sell everything on the market at the current pace. It was an improvement from 1.5 months in May 2022 and the historic low of just over 1 month in March 2022. A four-to-six month supply is considered a balanced market.
"Low inventory continues to be the state of the market," said Dan McCarver, a real estate agent with Better Homes and Gardens Real Estate Gary Greene - Bay Area/Clear Lake. "You get a rush of showings when you put a property on the market. There are definitely buyers out there. I think they've reconciled themselves to the higher interest rates."
McCarver said he has seen an increase in cash buyers and the use of adjustable rate mortgages from buyers hoping for lower rates in the future.
Sharilyn Schuh, executive vice president of business development at Select Title in Sugar Land, said the market has picked up since a super slow January as buyers accept higher interest rates and realize 2 percent to 3 percent interest rates are not coming back.
“People are still moving here,” she said, noting that inventory has improved and Houston is still creating jobs that draw people to the market.
Homes are taking longer to sell, staying on the market an average of 48 days in May, up from 30 days in May 2022 and nearly a week faster than the pre-pandemic level in May 2019, according to HAR.
katherine.feser@houstonchronicle.com
Katherine Feser covers a variety of subjects for the Houston Chronicle Business section. She coordinates some of the paper's most popular special sections, including the Chronicle 100, Home Price Survey, and Top Workplaces. She compiles many of the staples of the section, including the daily markets page, People in Business, event listings and real estate transactions.
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