HOUSTON – (By Ralph Bivins for RNR) – Houston set a new monthly record in July with approximately 11,000 homes sold, a 23 percent increase compared with July 2019, the Houston Association of Realtors reported.
It marked the first time monthly home sales in the region exceeded 10,000.
Historically low mortgage rates — with 30-year fixed-rate mortgages dipping below 3 percent — fueled the surge in buying activity.
The jump also reflected the release of pent-up demand that built up during the spring when sales activity was suppressed by the COVID-19 pandemic.
In April and May, home sales fell sharply as buyers stayed away to avoid infection and many sellers delayed listing homes to prevent strangers from entering their houses and potentially spreading the virus.
At the same time, the local economy faced serious stress: the pandemic combined with a crash in oil prices led to widespread job losses in the spring. With oil prices stabilizing around $40 a barrel and the rate of job losses easing, economic conditions have become less volatile.
After a very slow spring, pent-up demand helped drive a rebound: Houston posted a record 9,433 sales in June, followed by 10,975 single-family home sales in July.
The June–July recovery represents a striking turnaround from what HAR described as the ugliest spring area Realtors have seen in many years.
Year-to-date sales have moved ahead of last year’s pace, now running 2.7 percent above 2019’s record pace; in May the year-to-date total had been 6 percent behind the previous year.
“We are grateful for two consecutive months of strong activity across greater Houston; however, we do not consider the current pace of home sales sustainable given the shrinking supply of homes and expect business to taper a bit this fall,” said HAR Chairman John Nugent of RE/MAX Space Center. “Historically low interest rates make this an outstanding time to buy a home, but without inventory, there unfortunately isn’t much out there for consumers.”
Concerns About Inventory Justified? … Probably Not
Inventory of homes for sale is tight. Single-family inventories fell to a 3.0-month supply in July compared with 4.2 months a year earlier, according to HAR.
However, Houston’s inventory has fallen below a 3.0-month supply at several points over the past decade. While listings are constrained, it is not clear the shortage is severe enough to undermine the region’s unprecedented sales surge.
Pending sales remain strong: HAR reported 11,185 home sales were in the pipeline in July, a 34 percent increase over July 2019.
Given the volume of pending transactions, Houston’s market appears to have enough inventory to carry through the typically slower fall season without a dramatic drop in sales caused solely by a lack of listings.
Home sales often slow around the start of the school year, but 2020 has proven to be an atypical year in many ways — including the calendar for buying and selling homes.
Aug. 13, 2020 Realty News Report Copyright 2020
File: A Record 11,000 Homes Sold in July
