Houston Home Sales On The Upswing, Market briefs

In Houston, Houston home sales activity has recovered from an elongated slump with a 7.6 percent gain in February and a table set for a strong 2024.

Houston reported 6,221 single-family sales in February, almost 6 percent above the 5,781 sales in February of 2023, the Houston Association of Realtors said.

Home sales also increased in January of 2024.

Home prices have been increasing recently and the inventory of homes for sale has been expanding. In the Covid era the supply of homes to buy was extremely tight at times with some houses drawing multiple buyers.

The Houston area had 39,757 homes for sale in February, up 22 percent from February of last year when the inventory stood at 32,600 houses.

Inventory and Prices Up

The average price of a single-family home throughout Greater Houston rose 4.1 percent to $400,252 and the median price increased 3.0 percent to $329,686.

“The increase in home sales, slight appreciation in home prices and expanding inventory, creates opportunities for both buyers and sellers in the marketplace,” said HAR chair Thomas Mouton with Century 21 Exclusive. “With pent-up demand, consumers appear to finally be pushing aside interest rate concerns and returning to the market, which bodes well for the spring homebuying season.”

The average 30-year fixed-rate mortgage hit 6.94 percent Wednesday, up from 6.57 percent a year ago, as stated by a report by Mortgage News Daily.

Even if buyers aren’t truly becoming immune to higher mortgage rates, there is still optimism in the forecast.

Mortgage Rates to Moderate

National Association of Realtors Chief Economist Lawrence Yun said earlier this week, he expecting three rate cuts by the Federal Reserve this year, pushing the 30-year mortgages to more affordable levels.

Next year could be even better. But could mortgage rates dip below 6 percent in 2025?

“However, with anticipated further easing in inflation, especially as rents in the official measurement are showing calming patterns, 5 to 8 rounds of rate cuts by the end of next year will help lower mortgage rates,” Yun said. “The one big limiting factor is the large budget deficit. More government borrowing will mean fewer funds are available for mortgage borrowing. There is a good possibility that mortgage rates will head toward 6 percent, but they will be hard-pressed to go down further.”