Houston continued to set the world on fire with its rise in asking prices

Asking prices in Houston began 2015 on a soaring note, according to the Trulia Price Monitor. Prices were up 13.8 percent year-over-year in January, and a similarly strong 5.2 percent quarterly; meanwhile, rents were more measured, climbing 3.2 percent from a year ago.

It was another affirmation of the interesting state of Houston’s housing market – though the energy economy is slowing down, market forces continue pushing housing forward, with high demand and low inventory driving price growth.

Home Prices Slow Nationally as Market Changes

Meanwhile, home prices on the national stage continued to show signs of moderation. From December to January, asking prices rose 0.5 percent, which was the slowest monthly increase since August; similarly, January’s yearly gain of 7.5 percent was down from Jan. 2014’s 9.3 percent increase.

Going forward, the most important driver for home prices, according to Trulia Chief Economist Jed Kolko, will be local job growth, which is certainly in line with our reporting. As Kolko explained, that represents a 180-degree turn on how the housing recovery previously progressed, and it suggests interesting things for Houston going forward.

“For much of the recovery, the rebound effect was more closely tied to local price gains than job growth was,” Kolko said. “But today, things have reversed: Job growth is now much more important than the rebound effect. As home prices have increased and gotten close to long-term normal levels, and as investors and foreclosure sales have become a smaller part of housing activity, fundamental drivers of housing demand – like job growth – have taken over again.”

Take a look at our graph below for a broader take on asking prices increases: