HOUSTON – (Realty News Report) – Houston Realtors, facing the headwinds of rising mortgages rates, sold a total of 83,854 single-family homes were sold in Houston in 2023, a 12 percent decline from the 95,302 sold in 2022, the Houston Association of Realtors reported Wednesday.
Home Sales Down 12 Percent in 2023
“It is disappointing to have a down year for home sales, but the economic forces affecting Houston affected housing markets across the U.S., so this was not a uniquely Houston situation,” said HAR Chair Thomas Mouton with Century 21 Exclusive. “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. The expanded housing inventory and moderation in pricing we saw throughout 2023 have created a positive buying landscape for 2024.”
The Houston realty association said rising mortgage rates were the primary deterrent to homebuying throughout 2023, with some consumers scrapping plans to purchase a home and many others opting to rent instead. Houston real estate kicked off the year with double-digit declines in sales volume that began to ease by the spring. Slower sales combined with a steady influx of new listings enabled inventory to grow and eventually match healthier 2019 and 2020 levels. By October, as the Fed continued its efforts to stave off inflation, which it had deemed as merely transitory a year earlier, mortgage rates climbed to levels not seen in 20 years when they exceeded 8 percent.
Houston Home Prices Down Only 0.36 Percent in 2023
The average price of a home sold in Houston in 2023 was $412,161, virtually unchanged from the average of $413,657 in 2022.
In recent years, the inventory of homes for sale had been incredibly small leaving buyers chasing after the few homes that hit the market. Sellers received multiple offers often.
At the outset of 2023, inventory was at a 2.6-months supply. In October and November, it grew to a 3.5-months supply, the greatest level since November 2019 when the market had a 3.6-months supply. In December, inventory registered a 3.3-months supply. A 4.0- to 6.0-months supply has traditionally been considered a “balanced market” in which neither buyer nor seller has an advantage.
Home builders adapted to market conditions and were able to outpace existing home sales in many cases.
Builders have engineered mortgage-rate buy-downs enabling home buyers to obtain 30-year mortgages at less than 6 percent while the prevailing mortgage rates soared over 7 percent in the open market.
Houston placed 13 communities in RCLCO’s Top 50 Master Planned Communities year-end report on the nation’s new home sales.
Jan. 10, 2024 Realty News Report Copyright 2024
Photo by Ralph Bivins, Realty News Report, copyright 2024
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File: 83854 Homes Sold in Houston in 2023