Home sales decreased in Houston during September as mortgage rates surpassed 7%, according to the latest Housing Market Update from the Houston Association of REALTORS®.

Closings declined 5.7% year over year, with 7,030 home sales during the month. Meanwhile, the average 30-year mortgage rate reached 7.03% during the last week of September and continued to increase to 7.28% and 7.4% in the first two weeks of October, Freddie Mac reported.

Pending listings decreased by 11.6% year over year, with 6,789 properties going under contract, indicating slow sales in the coming weeks and months as well.

“Higher mortgage rates are making buyers look more closely at what they can comfortably afford,” said HAR Chair Theresa Hill. “People are taking a little more time, weighing their options and focusing on long-term affordability. Stable prices and a broad selection of homes are helping keep opportunities within reach.”

As sales decreased, active listings rose 6.3% year over year, with 40,192 homes on the market. Given the rate of sales, Houston had a 5.5-month inventory, up 0.4 months year over year.

The average home price increased 0.7% to $421,311, while the median was steady at $325,000.

Existing-home sales

Looking at only existing-home sales (excluding new construction), sales were steady year over year with 5,062 closings during the month. The average price fell 1.1% to $427,110, while the median was steady at $325,000.

Condo and townhome sales

For-sale townhomes and condominiums saw a 21% annual decrease in closings, with just 323 properties sold in September. Pending sales fell 15.9%.

The average sales price dipped 4.6% year over year to $261,052, while the median dropped 9.1% to $209,000.

Meanwhile, active listings increased 6.9% to 3,609, giving the townhome/condo market a 9.3-month inventory, up from eight months a year prior.