Opportunity — that is what I expect the theme for Houston housing to be this year. Buyers, sellers and REALTORS® will find plenty of opportunities in Houston’s healthy and growing real estate market.
Just look at the recent upward trajectory in the market. After two consecutive years of declining sales, the Houston housing market experienced modest growth in 2024. Single-family home sales are on a roll, with five consecutive months of positive numbers. To put that in perspective, this five-month streak of positive sales hasn’t been seen since the first half of 2021, when mortgage rates were around 3%. Consumers appear to be pushing aside their interest rate jitters and returning to the market as enthusiastic buyers.
We all know that mortgage rates are a major player in the game. They’ve been a bit of a wild card lately. Currently, rates are hovering above 6%, but economists anticipate a gradual decline throughout the year. This is good news for buyers and sellers, as it could reignite some of that pent-up demand we’ve seen. It’s also important for prospective homebuyers to adjust their expectations. Don’t hold out for the 3% mortgage rates that we saw during the pandemic. We’ll likely see rates stay around 6% this year.
Two key market conditions have created a favorable landscape for buyers in 2025 — expanding inventory and moderating home prices. Inventory remains tight nationwide, but in Houston it is a more balanced market. Inventory in the Houston area is at its highest level in nearly a decade. That means there are a wide array of housing options available. So many times, I see clients lose out on the perfect home because they’re hoping for a price drop or lower interest rates. That’s why I always tell them: if you love it, make an offer!
The easing mortgage rates and moderating home prices contributed to improved housing affordability in Houston for the second half of 2024. According to HAR’s Housing and Rental Affordability Report, 40% of Houston-area households could afford the median-priced home in the final quarter of last year, which is up from 38% during the same time in 2023. However, housing affordability is still a challenge for many people in Houston and across the country. There are thousands of down payment assistance programs available to help potential buyers achieve their dream of homeownership. (You may explore assistance programs at HAR.com/downpayment.)
In January, the latest month for which HAR has compiled sales data, single-family home sales increased for the fifth month in a row, edging up by 1.2% year-over-year with a total of 5,064 units sold across the Greater Houston area versus 5,002 in 2024. The average price rose 4.4% to $406,492, while the median price increased 1.6% to $325,000.
Days on market, or the actual time it took to sell a home, increased from 59 to 61 days. Months of inventory increased to a 4.3-months supply in January compared to 3.2 months a year earlier. The current national supply stands at 3.3 months, as reported by the National Association of REALTORS®. A 4- to 6-month supply is generally considered a “balanced market.”
Houston’s rental market maintained its strength in 2024 as many prospective homebuyers waited to see if mortgage rates would stabilize. There is a robust supply of rental properties to meet demand while those consumers wait for conditions that they consider more suitable to buy a home. I believe there will be continued strength in the rental sector this year.
While I wish I had a crystal ball to show me the direction of the real estate market, all indications are that Houston housing will remain strong throughout 2025. While there will undoubtedly be ups and downs, Houston’s diverse economy makes our market resilient. And with a skilled REALTOR® guiding them, buyers and sellers will be well-equipped to achieve their real estate goals.
Shae Cottar is the 2025 Chair of the Houston Association of REALTORS®.