The frenetic pace of home sales that dominated the Houston housing market throughout most of the pandemic continues to “slow its roll,” according to a new report by the Houston Association of REALTORS® (HAR).
Some consumers, facing record pricing, rising interest rates and limited inventory, have moved to the sidelines or opted to rent. As a result, home sales experienced their fourth consecutive monthly decline in July, while new listings buoyed inventory to the highest level in two years.
According to HAR’s July 2022 Market Update, single-family home sales dropped 17.1%, with 8,370 units sold compared to 10,102 in July 2021. The report noted that that is the lowest one-month sales volume since January 2022.
The market is trailing 2021’s record-setting pace by 1.3% on a year-to-date basis. The only housing segment that did not experience negative sales in July was the $500,000 to $1 million segment, which leaped 40.6%.
Homes priced between $250,000 and $500,000 registered the smallest sales decline, falling 9.2%. With a scant assortment of homes priced below $250,000, consumers have had to weigh more expensive property options, shift their focus to rental homes or postpone buying or renting plans altogether.
“The scorching pace of Houston housing throughout most of the pandemic was completely unsustainable, so the cooling that we have experienced over the past four months was expected and is all part of a market normalization,” said HAR Chair Jennifer Wauhob. “As long as we continue to see inventory grow and prices level off, I believe homebuyers will move off the sidelines and back into the marketplace. An easing of interest rates would help as well, particularly for first-time buyers who desperately want to seize the American Dream of homeownership.”
The average price of a single-family home rose 9.9% in July to $426,494, well below the record high of $438,844 reached in May 2022. Likewise, the median price jumped 12.7% to $348,740, well below last month’s highest median of all time, $354,613.
The average price for a single-family home in Houston broke the $400,000 mark in March this year. The median price has remained above $300,000 since May of 2021. After surpassing the 100% mark for three straight months, the close to original list price ratio for single-family homes fell to 98.9% in July. According to the report, a reading above 100% signals that most buyers paid above the list price for homes on the market.