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Brokers closed on 6,973 single-family homes in September, a 1.7 percent increase over September ’23. While an improvement over last year, the month was still weak given that sales prices have been relatively flat all year, interest rates are trending down, and consumers seem more upbeat about the economy.

Home prices typically trend down during the fall as the summer peak selling season ends. That appears to be the case again this year. The median price of a single-family home sold through the Houston Association of Realtors’ Multiple Listing Service (MLS) was $335,000 in September, down from $337,000 in August and $350,000 in July. If the market follows historic patterns, home prices will remain weak through January before picking up in the spring.

From late ’20 to late ’22, home prices rose at a double-digit annual rate. Through most of ’23, as fears of a recession set in, prices declined at single-digit rates. Since January ’24, the annual rate of price appreciation has averaged 1.7 percent. 

Single-family inventory is up 28.1 percent from this time last year and nearly triple the level of March ’22, the most recent low point. As of late September, there were over 30,000 single-family homes listed for sale through the MLS.

The Houston resale market has 4.4 months of inventory, up from 3.4 months this time last year. That’s how long it will take to deplete current inventory based on the prior 12 months’ sales activity. A 3.5- to 4.0-month supply is considered a balanced market, where neither seller nor buyer has an advantage. With inventory exceeding four months, Houston has shifted from a seller’s market to a buyer’s market.

Mortgage rates are trending down. The average interest rate for a 30-year fixed mortgage has fallen by 167 basis points from an October ’23 peak. In the week ending October 3, 2024, the rate on a 30-year mortgage was 6.12 percent. 

September saw a decrease in the sale of townhomes, condos, and high-rise units. However, the median prices ticked up even as inventories continued to grow.

Prepared by Greater Houston Partnership Research

Patrick Jankowski, CERP
Chief Economist
Senior Vice President, Research
[email protected]

Leta Wauson
Research Director
[email protected]