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Brokers closed on 8,538 single-family homes this May, a 1.5 percent dip from May of last year, according to data provided by the Houston Association of Realtors (HAR). The drop in sales was largely due to the derecho storm which hit the region May 16, causing power outages and disrupting business, not to any weakness in the Houston economy.

HOME PRICES

Home prices increased marginally in May compared to last year. The median price of a single-family home was $345,000, up only $5,000 (1.5 percent) over last year. During the height of the sales boom, prices rose between 15 and 20 percent annually. The median-priced home still sells for nearly $100,000 more than it did five years ago.

INVENTORY

There were 28,481 single-family homes for sale through HAR’s Multiple Listing Service (MLS) in May, up 48.6 percent since last year. Listings are up 175 percent from their low point of 10,412 in May of ’22.

May’s listings translate into 4.0 months of inventory, up from 2.7 months last year. That’s how long it will take to deplete current inventory based on the prior 12 months’ sales activity. A 3.5- to 4.0-month supply is considered a balanced market, where neither seller nor buyer has an advantage. Inventory was at its lowest in March of ’22 when there was only a 1.1-month supply.

INTEREST RATES

Mortgage interest rates continue to rise. The 30-year fixed rate averaged 7.06 percent in May, up from 6.99 percent in April and 6.82 percent in March. 

• As of mid-June, the rate averaged 7.17 percent. The typical monthly note on a median-priced home ($345,000) in Houston is $2,731. That assumes 20 percent down and include taxes but doesn’t include insurance or homeowner’s association fees.
• In June ’19, when the mortgage rate averaged 3.08 percent, the typical monthly note on a median-priced home ($253,000) was $1,495. 
• In June ’14, when the mortgage rate averaged 4.2 percent, the typical monthly note on a median-priced home ($214,000) was $1,372. 

May saw an increase in the sale of high-rise units but a decline in the sale of townhomes and condos. The inventory of townhomes and condos is currently ay 4.7 months; for high-rise units, at 8.5 months. 

Prepared by Greater Houston Partnership Research

Patrick Jankowski, CERP
Chief Economist
Senior Vice President, Research
pjankowski@houston.org

Leta Wauson
Research Director
lwauson@houston.org