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Brokers closed on 7,340 single-family homes in August, an 8.3 percent drop over August of last year. This was also the third-worst August of the past 10 years. The worst August was in ’17 when Houston was dealing with Hurricane Harvey. The second worst was in ’15 when the Fracking Bust stifled home sales.

The median price of a single-family home sold through the Houston Association of Realtors’ Multiple Listing Service (MLS) was $336,940 in August, down 0.3 percent from August of last year. Except for one month early in ’23, home prices have held within a narrow range—$320,00 to $350,000—over the past two years. 

From late ’20 to late ’22, home prices rose at a double-digit annual rate. Through most of ’23, as fears of a recession set in, prices declined at single-digit rates. Since January ’24, the annual rate of price appreciation has averaged 1.8 percent. 

Single-family inventory is up 34.6 percent from this time last year and nearly triple the level of March ’22, the most recent low point. Inventory has risen 14 months out of the last 18. As of late August, there were over 30,000 single-family homes listed for sale through the MLS.

The Houston resale market has 4.5 months of inventory, up from 3.2 months this time 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. With inventory exceeding four months, Houston has shifted from a seller’s market to a buyer’s market.

Interest rates continue to drift downward. The average rate for a 30-year fixed mortgage has fallen by 144 basis points from an October ’23 peak. In the week ending September 5, 2024, the average interest on a 30-year fixed-rate mortgage was 6.35 percent. Mortgage rates will fall further if the Federal Reserve moves to lower the federal funds rate at its mid-September meeting.

August saw a decrease in the sale of townhomes, condos, and high-rise units as well. The median price for the three also fell.  Inventories continue to grow.

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