HOUSTON – (Realty News Report) – Houston’s single-family home sales fell 8.5 percent last month as 7,557 units sold were sold in July compared to 8,256 in July 2022, the Houston Association of Realtors reported.
The housing market in Houston and around the nation boomed in the Covid years as low mortgage rates motivated buyers.
Homes flew off the shelves as 30-year mortgage fell, even dipping below 3 percent. But in March of 2022 the Federal Reserve began a series of brutal rate hikes to head off inflation, after spending a year dismissing rising consumer prices as short-term transitory inflation. Inflation continued to soar.
The Pain of a Percentage Point – From 2.78 Percent to 7 Percent
In November of 2020, the 30-year fixed rate mortgage averaged 2.78 percent, according to Freddie Mac.
Today, a typical mortgage is near 7 percent.
The average 30-year mortgage rate hit 6.9 percent last week, up from 4.99 percent a year ago, Freddie Mac reported. “The combination of upbeat economic data and the U.S. government credit rating downgrade caused mortgage rates to rise this week,” said Sam Khater, Freddie Mac’s Chief Economist. “Despite higher rates and lower purchase demand, home prices have increased due to very low unsold inventory.”
Even a robust home market cannot maintain momentum when mortgage rates and home prices have risen so significantly.
The average home price in Houston was $428,140 in July, up 0.6 percent from $425,378 in July of 2022.
Houston’s highest average price on record was $438,350 in May 2022.
The days of rapid change may draw to a close soon, according to HAR leadership.
More listings are on the market these days, following times of short supply when many homes would get multiple offers on the first day it hit the market.
“Each passing month has moved the Houston housing market closer to what we consider normal, with seasonal influences, but consumers are still understandably taking a cautious approach to the homebuying process, and many are ultimately choosing to rent,” said HAR Chair Cathy Treviño with LPT Realty.
In a recent interview on The Ralph Bivins Project podcast, Treviño said some sellers are even chipping in with some seller-financing to help buyers stretch their budgets.
A more plentiful inventory also influences prices to be lower.
Aug. 9, 2023 Realty News Report Copyright 2023
THE RALPH BIVINS PROJECT PODCAST
File: Why Houston Home Sales Are Falling
Photo: By Ralph Bivins, Realty News Report Copyright 2023