The Houston Association of REALTORS® has released its December/Full-Year 2022 Housing Market Update, which reveals that single family home sales were down 10.9% compared to 2021. This brings an end to the record-setting hot streak the Houston real estate industry experienced before and during the pandemic.

Single-family home sales amounted to 95,113 in 2022, which is nearly an 11% decrease from the amount sold throughout 2021. That marks the first year of declining sales since 2015. Additionally, total dollar volume decreased by 1.5% to $39.3 billion. HAR says limited inventory and high mortgage rates are likely to blame for the downturn in home sales, which will probably continue into 2023.

“While disappointing, it was no surprise that 2022 ended the way it did given the economic forces that affected the market during the latter half of the year, most notably inflation, mortgage rates and persistently low inventory,” said HAR Chair Cathy Treviño. “We have been in uncharted territory since the pandemic, but have generally held strong, and I anticipate the market returning to healthier levels later this year, especially with inventory levels improving, mortgage rates easing and prices moderating.”

The downturn in Houston real estate began when the average listing price rose to the all-time high of $438,301 in May, quickly followed by the median price hitting an all-time high of $354,995 in June. Home sales began to decrease in April and continued to decrease throughout the rest of 2022. Townhome and condominium sales faced similar fates, with declining sales from June through the end of December.

One positive outcome of these market conditions was a healthy increase in inventory, which reached a yearly high of 2.8 months in October. That number was sustained throughout November.