The Houston Association of Realtors released their October Market Report on November 9, 2022. This report revealed that single-family home sales fell 22.8 percent, with 6,641 units sold compared to 8,597 in October 2021. These numbers show that, on a year-to-date basis, the market now trails 2021’s record-setting volume by 6.7 percent.
HAR’s position is that home sales were dampened by rapidly rising mortgage interest rates as part of an overall market cooldown. This seventh consecutive month of declining sales and rising inventory are described as the market continuing “toward a more normalized, pre-pandemic pace.”
The hard numbers are as follows: single-family home sales fell 22.8 percent, with 6,641 units sold compared to 8,597 in October 2021. As of November 1, the market now trails 2021’s record-setting volume by 6.7 percent.
“The Houston housing market is heading towards more balanced conditions-- we saw years of unprecedented growth, and it appears the market is finally nearing pre-pandemic levels. Higher mortgage rates are softening buyer demand. But as prices level off and inventory grows, we’re going to see more consumers move from the sidelines to the marketplace.” HAR Chair Jennifer Wauhob, with Better Homes and Gardens Real Estate Gary Greene
While the top end of the market (homes priced $500,000 and $999,999) saw the smallest decline in sales at 6.6 percent, the very low supply of homes priced at or under $250,000 has pushed many consumers into the rental market.
October’s average price of a single-family home rose 7.2 percent in October to was $403,712. While this is below May’s record high of $438,290, it is still a 7.2 percent increase. The average price first broke the $400,000 mark back in March. The median price of a single-family home rose 8.4 percent to $330,500-- which is also below the record of $354,000, reached in June 2022—and has held above $300,000 since May of 2021.
Due to mortgage interest rates hovering around seven percent, more than double the rates of a year ago, along with a lack of housing inventory below $400,000, buying activity slowed for a seventh straight month. Year-over-year single-family home sales declined by 22.8 percent, while year-to-date sales trailed last year’s pace by 6.7 percent.
Along with the drop in single-family home sales, total property sales and total dollar volume also went down and pending sales declined 23.4 percent. Active listings (the total number of properties available) went up 43.0 percent.
Months of inventory continued to increase and reached 2.8-months in October-- the highest level since July of 2020. Housing inventory nationally is at 3.2-months supply, according the National Association of Realtors (NAR). To reach a “balanced market,” in which neither the buyer nor the seller has an advantage, inventory would need to reach six months.