HOUSTON – (Realty News Report) – August 2020 set a new record as the strongest August for home sales in Houston history, and momentum in the market appears likely to continue.
The Houston Association of Realtors reported 9,195 single-family homes sold in August 2020, a 6 percent increase from the 8,673 homes sold in August 2019. This marks the most active August on record for Houston real estate.
One of the best indicators for future market strength—pending sales—was exceptionally robust. HAR recorded 10,598 pending single-family home sales in August, a 36 percent jump from a year earlier. With that many contracts in place, September was expected to remain strong.
Low mortgage interest rates are a primary driver of continued buyer activity. Thirty-year fixed-rate mortgages hovered near record lows around 3 percent in 2020, making homeownership more affordable for many prospective buyers and fueling demand.
The sharp rebound followed a difficult spring, when the coronavirus pandemic severely disrupted the market. Houston experienced massive job losses that affected the broader economy and housing. After steep declines in sales during April and May, the market rebounded strongly beginning in June.
Sales gains were broad-based, including the luxury segment. Homes priced at $750,000 and above registered the largest percentage increase, rising 40.3 percent compared with August 2019. Higher-end sales had lagged earlier in the year, and gains at the top may have been supported by wealth effects from a resurgent stock market.
The single-family home median price rose to $269,000 in August, an increase of 7.6 percent from the previous August, according to HAR.
Available inventory remains tight. A combination of fewer new listings and continued strong sales pushed single-family inventory down to a 2.8-month supply in August, compared with 4.1 months a year earlier. That low level of supply had not been seen since April 2015.
Strongest August in Houston Home Sales
HAR Chairman John Nugent of RE/MAX Space Center noted that constrained inventory could slow the pace of sales. “Buyers can still benefit from record-low interest rates, but limited inventory reduces available housing options,” he said.
However, some concerns about supply constraints may be tempered by ongoing homebuilding activity. Construction and housing starts in the Houston area were strong in 2020, and by early September there were more than 34,000 properties listed for sale across the region. That level of new construction and active listings should help meet demand in many market segments.
Given the combination of strong pending sales, rising prices, and continued construction, Houston appeared poised for a very active year in real estate in 2020.
Sept. 10, 2020 Realty News Report
File: Strongest August in Houston
