Houston Home Sales Skyrocket in January

HOUSTON – (Realty News Report) – Home sales in Space City blasted off the launch pad like an Artemis rocket in January with a 9 percent gain to start the year, according to the Houston Association of Realtors.

Houston’s home sales weren’t the only thing taking off in January. Home price were up. The inventory of homes for-sale expanded. And “pending sales” – the number of houses that went under contract and expected to become finalized sales in February and March also increased.

January’s upward momentum even produced a report of a home drawing multiple offers and house selling for more than asking price.

“I had an open house for one of my agents the other day and hundreds of people were there. Hundreds. Of course, there were multiple offers on that deal, and it did go slightly over the asking price. But what I know is that one person got it and 199 are still in the marketplace waiting for the right house and the right opportunity,” said Bill Baldwin, owner of Boulevard Realty, which specializes in selling houses in The Heights and other Inner Loop neighborhoods. “So, I know there’s pent-up demand. We’ve counted more showings in January than ever before.”

Housing’s gains in early 2024 follow a dismal performance over the last two years. A sharp rise in interest rates choked the realty market.

This was caused by what many view as miscalculations by the Federal Reserve, which was slow to react when inflation rose post-Covid, insisting that the signs of inflation were merely “transitory” or temporary. When the Fed finally decided to act, it bombarded the economy – and the housing market – with a series of overly zealous 75-basis point rate hikes.

So home buyers, who were accustomed to mortgage rates of 3 to 4 percent were faced with mortgages of 5, 6, and 7 percent.

With higher mortgage rates prevailing, buying a house became unaffordable for many Americans and first-time homebuyers.

Many home builders adapted quickly to rising rates by offering mortgage rate buy-downs to allow their customers to move in with a mortgage rate under 6 percent. New homes grabbed a higher market share with those builder incentives.

However, Houston’s job growth and population gains and a decline in consumer resistance seem to outweighing today’s high mortgage rates, which have been around 6.5 in recent weeks.

Some believe that consumers are adjusting to the new reality of today’s mortgage rates and have accepted that 3 percent mortgages may never exist again.

Telling sales statistics may be appearing a Houston Association of Realtors report dealing with only existing single-family homes – with no new homes, and no condominium sales included. Existing home sales totaled 3,488 in January, up 8.2 percent from the same month last year. The average price rose 3.7 percent to $387,520 and the median sales price rose 3.3 percent to $310,000.

The supply of homes for sale has been growing larger. In January in Houston, the months of inventory expanded from a 2.6-months supply last January to 3.3 months. A 6-months supply of homes has been considered a balanced market.

Houston reported 6,098 single-family home sales in January 2024, compared to 5,703 in January of 2023.

The great hope is that the Federal Reserve will ease into a 25-basis point decrease in the first half of the year. Any reduction in rates would help all real estate markets and importantly it would make homebuying a bit more affordable.

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