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Houston home sales continue to drift toward pre-pandemic levels. Prices and interest rates remain elevated, however. As a result, it took twice as long to sell a home in February than it did in August. 
 
Brokers closed on 5,723 single-family homes in February ’23, a rate comparable to closings in the three Februarys immediately prior to the pandemic. In a normal market, one would expect home sales to be somewhat higher, given that region has gained a net 186,000 jobs and 300,000 residents since ’19.

Home prices have been slow to follow the path of home sales. The median price of a single-family home peaked shy of $354,000 in June ’22, trended downward into the fall, and bounced between $315,000 and $330,000 over the past five months (Oct ’22 – Feb ’23).  

Interest rates remain sticky, slipping only 0.1 percentage points since December. The interest on a 30-year fixed-rate mortgage averaged 3.26 percent in February. That’s down from  7.0 percent in early November but well above historic levels. In the 10 years prior to ’22, the rate on a 30-year mortgage averaged 3.8 percent. 

Though home prices and interest rates have fallen from their recent peaks, monthly house notes remain well above historic levels. The principal and interest payments for a median-priced home in Houston are up by over 80.1 percent compared to three years ago.  As a result, only 40 percent of Houston households earned enough to purchase a median-priced home in Q4/22, according to the Houston Association of Realtors. That’s down from 51 percent in Q4/21 and 60 percent in Q4/20. 

With fewer Houstonians able to qualify for a loan, homes are taking longer to sell. The average number of days-on-market, or how long it takes to sell a home, continues to grow. It took three weeks longer to sell a home this February than it did in February of last year.

Townhomes and condos represent a small share of the market, accounting for 7.7 percent of total home sales in February. Still, they provide an affordable housing option for many Houstonians. Sales of both townhomes and condos decreased in February as well.

Prepared by Greater Houston Partnership Research

Patrick Jankowski, CERP
Chief Economist
Senior Vice President, Research
pjankowski@houston.org

Clara Richardson
Research Associate
crichardson@houston.org