Despite year-over-year declines, the Houston housing market ended the year “on solid footing,” according to the latest housing market update from the Houston Association of REALTORS®.

Thanks mostly to mortgage rates that hit 20-year highs, single-family home sales fell 12% in 2023 with 83,854 sales during the year compared to 95,302 in 2022. That marks the second consecutive year of annual declines. The total dollar volume, meanwhile, dropped 12.6% to $40 billion, down from $45.6 billion in 2022.

“It is disappointing to have a down year for home sales, but the economic forces affecting Houston affected housing markets across the U.S., so this was not a uniquely Houston situation,” said HAR Chair Thomas Mouton. “We believe that home sales will pick up once consumer confidence is restored, and that depends on what the Federal Reserve does with interest rates and evidence that inflation is no longer a threat. The expanded housing inventory and moderation in pricing we saw throughout 2023 have created a positive buying landscape for 2024.”

At the start of 2023, Houston had a 2.6-month inventory supply. That grew to a 3.5-month supply in October and November, the highest level seen since November 2019. In December, inventory fell back to a 3.3-month supply, an increase of 0.7 months year over year. Total active listings rose 13.9% year over year in December, with 38,028 homes on the market compared to 33,394 in December 2022.

Single-family home prices remained statistically flat from 2022 to 2023, with the average decreasing marginally from $413,657 to $412,161; the median decreased 2.5% from $338,295 to $330,000.