Houston’s Housing Market Sees Surprising Surge

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Houston’s housing market defied expectations in January, showing robust growth despite looming concerns over mortgage interest rates. 

The 9 percent increase in single-family home sales in January compared with a 30 percent drop for the same period last year,  according to the Houston Association of Realtors. This year’s performance marks only the second year-over-year increase in sales for the Bayou City since 2021. 

The total of  5,010 units sold appears to signal a resumption of buyer confidence despite economic uncertainties such as ongoing inflation and interest rates that will remain above the rock-bottom levels of the pandemic and preceding years.

Modest increases in home prices trailed recent gauges of inflation overall, with the median in Greater Houston up  by 2 percent, to $320,500. Total dollar volume was up 12 percent year-over-year, to $2.3 billion. 

While the overall market saw a boost, results differed by segment. The media for homes priced between $500,000 and $1 million rose 17 percent year-over-year. Luxury properties priced above $1 million rose 15 percent. Premium real estate offerings have consistently outperformed other price points as they have remained largely inoculated from mortgage rate hikes. 

The days on market for single-family homes showed modest improvement,  decreasing  from 60 to 58 days. However, months of inventory expanded to a 3.3-month supply, up from 2.6 months the previous year. That puts Houston slightly ahead of the national average of a 3,2-month supply. 

The townhome and condominium submarket ran counter to the trend for single-family homes, with a 4 percent drop in sales last month. Townhomes and condos did better on price, though, with gains of 14 percent, to $247,430 and $223,000, respectively.