Why Houston Home Sales Are Falling

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

Listen on Spotify: Ralph Bivins with Cathy Trevino, chair of HAR

Listen: on YOU TUBE to the Ralph Bivins Project podcast with Cathy Treviño

LISTEN: THE RALPH BIVINS PROJECT podcast with Edward Griffin of Griffin Partners

LISTEN: THE RALPH BIVINS PROJECT podcast with Michael Scheurich of Arch-Con

LISTEN: THE RALPH BIVINS PROJECT podcast with Mark Taylor of CBRE

LISTEN: THE RALPH BIVINS PROJECT podcast  with Stephen Meek of StreetLights Residential.

LISTEN: THE RALPH BIVINS PROJECT podcast with Carlos Bujosa of Transwestern 

LISTEN: THE RALPH BIVINS PROJECT podcast with Kris Larson of Central Houston Inc.

LISTEN: THE RALPH BIVINS PROJECT podcast with  Mike Spears of Lee & Associates Houston

LISTEN: THE RALPH BIVINS PROJECT podcast with  Maria Perez of Gensler

LISTEN: THE RALPH BIVINS PROJECT podcast with   Bob Parsley of Colliers  

File: Why Houston Home Sales Are Falling

Photo: By Ralph Bivins, Realty News Report Copyright 2023

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