Despite cooled-down market conditions throughout January, the Houston Association of REALTORS® January 2023 market update indicates several positive signs for potential homebuyers in the coming year.

Single-family home sales were down 29.9% year over year in January, with 4,549 homes closed compared to 6,492 during January 2022. This represents the 10th straight month of year-over-year decline. Closings were additionally down in all segments of the Houston market. However, January’s single-family sales are only down 4.6% compared to January 2022 (prior to the pandemic).

“January was a continuation of the slowdown that began last year with an onslaught of challenging economic conditions,” said HAR chair Cathy Treviño. “I think what’s happening now reflects more of a return to seasonal home sales trending — slower volume during the holidays and new year — than a market in distress. Certainly consumers want assurances that inflation is subsiding, so if mortgage rates stabilize and homes continue hitting the market at more affordable price points, we could expect an upswing in sales later this year.”

While the average and median prices of single-family homes also increased in January by 1.5% and 1.6%, respectively, these are the smallest year-over-year price increases seen since October 2019. Inventory has also grown to a 2.7-month supply — below the national average of 2.9 months, but well above the 1.3-month supply of January 2022. These changes indicate a slow but steady shift towards a buyer-friendly market in Houston.