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Houston home prices continue to rise at double-digit rates, according to data provided by the Houston Association of Realtors (HAR). Two years ago, the median price of a single-family home sold in Houston was just under $249,000; a year ago, just over $300,000; as of May ’22, the median price topped $350,000.
Mortgage rates are on the rise as well. The average interest rate on a 30-year fixed rate mortgage was 5.23 percent in the week ending June 9, 2022. That’s up from 2.99 percent in the comparable week in June of ’21.
The market may have peaked, however. From December ’20 to December ’21, single-family home sales grew at double digit rates. Since March of this year, they’ve grown at single digit rates. In May, sales were up only 2.0 percent compared to May of last year.
In another sign the market may be peaking, the 12-month total of homes sold in Houston has plateaued. In the 12 months ending May, Houston area realtors closed on 134,183 homes, compared to 134,189 for the 12 months in April, and 134,157 for the 12 months ending in March.
Available inventory is ticking up as well. Active listings this May were the highest they’ve been for the month of May since ’19. The market had 1.6 months of inventory this May, up from 1.3 months earlier in the year. That still reflects an extremely limited supply of resale housing. A 6.0-month supply is traditionally considered a “balanced market,” in which neither the buyer nor the seller has an advantage. Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months of sales activity.
Likewise, listings have inched up. In May ’22, active listings of all property types (single-family, townhomes, condos, duplexes) were up 14.9 percent over May of ’21. They are still 38.0 percent below where they stood five years ago.
Other points of note:
• Days on Market, or the actual time it took to sell a home, fell from 35 days in April to 29 days in May.
• HAR reports that a majority of buyers in May paid above list price for homes on the market.
• The $500,000 to $1.0 million housing segment was the “hot” performer of the month, registering a 38.3 percent year-over-year gain. That was followed by the luxury segment, homes priced at $1.0 million and above, which jumped 30.2 percent. The $250,000 to $500,000 housing segment landed third place with a 10.7 percent increase.
Prepared by Greater Houston Partnership Research
Patrick Jankowski, CERP
Senior Vice President, Research
The average price for a single-family home in Houston in May '22.
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