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Monthly Update: Home Sales

July '23, Latest Data
Published on 8/10/23

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Estimated Read Time: 2 minutes

Houston’s housing market typically booms in late spring and early summer as families purchase homes and settle in before a new school year starts. That hasn’t been the case this year, however. May-to-July sales in ’23 were their weakest in the past five years.

Higher interest rates have sidelined buyers. Some are priced out of the market. Others are waiting for rates to drop before looking for a new home. And existing homeowners are reluctant to sell knowing any new home would likely require a higher monthly payment. 

For example, the 30-year fixed-rate mortgage averaged 6.84 percent in July, according to Freddie Mac. And 60 percent of current homeowners have mortgage interest rates below 4.0 percent, according to Zonda. Jumping from 4.0 to 6.8 percent (the July average rate) on a $400,000 home adds $558 to the monthly payment. Across the board, higher payments are keeping many would-be homebuyers out of the market.

Higher rates and higher home prices began to drag on the market early last year. The 12-month moving total for single-family sales peaked at 109,029 in March ’22 and has trended down since, falling to 85,445 this July, the lowest level since May ’20.

At the March ’22 peak, when the interest rate on a 30-year mortgage was 4.17 percent, the monthly note on a $335,000 home (median price then) was $2,412. Today, with rates at 6.84 percent, the monthly note on a median-priced home ($340,000) is $2,512. Though the cost of the home has risen only 1.5 percent over the period, the monthly payment has risen 17.3 percent. Again, this doesn't include higher insurance premiums and homeowners' association fees.

The upside to all this, higher costs and weaker sales have boosted inventories. Single-family listings are up nearly 50 percent since July ’21. Compared to March ’22, they have more than doubled (10,412 v. 22,775).

The slower pace of sales and the increase in listings have helped stabilize prices. The median price for a single-family home sold in July ’23 is unchanged from August of last year.

Sales activity may start picking up. Job growth remains strong. The much-anticipated U.S. recession has failed to materialize. Wage growth is picking up. Consumer confidence is building. And consumers have begun to realize interest rates are unlikely to decline in the near future. Single-family pending sales were up 12.1 percent in July compared to July of last year, a sign buyers may be returning to the market.

To recap July, single-family home sales fell, prices drifted downward, and listings increased substantially. Townhomes sales slipped while sales of high-rise units rose. 

Prepared by Greater Houston Partnership Research

Patrick Jankowski, CERP
Chief Economist
Senior Vice President, Research

Clara Richardson
Research Associate





The average price for a single-family home in Houston in July '23.


Houston area realtors sold 9,223 single-family homes in July '23.

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