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The last year has been one of whiplash for Houston's housing market. Coming off record gains in 2021, Houston real estate accelerated even faster in early 2022 with double-digit price hikes and more bidding frenzies. But by summer, the music had stopped as soaring mortgage rates and recession fears brought an abrupt halt to the breakneck growth. Now, as 2022 gives way to 2023, Houston finds itself with a housing market headed in the opposite direction.
Home values have seen moderate appreciation, making Houston an intriguing market for both buyers and sellers. As the city evolves, factors such as job growth, infrastructure development, and the local economy will play pivotal roles in shaping the future trajectory of the Houston housing market.
This intel and data dive will arm you with everything needed to understand Houston’s shifting housing landscape between the peak 2021 market and the new reality today. Let's take a look at the numbers from October!
Our internal numbers in 2022 & 2023 compared:
*Includes adjustment for larger client base
After several years of a red-hot housing market, home prices and sales are forecasted to moderate with slowing demand and more inventory coming onto the market. Price growth and bidding wars are easing back, inventory is improving for buyers, and timelines are stretching out.
Demand has proven resilient too despite worsening affordability, as remote work trends and demographics still favor buying. So conditions appear headed for more balance between buyers and sellers versus escalation or crash on either end. Much depends on the economy avoiding recession and rates steadying.
So in summary – cooler and calmer, yes; distressed or dire, no. The housing frenzy fades but a measured market emerges.
As 2023 begins to wrap up, we see some light at the end of the tunnel. Home prices are expected to finally fall in 2024 according to realtor.com. However, prices are only expected to drop down about 1.7% which is not enough to give buyers some financial relief.
Unfortunately, economists do not see mortgage rates coming back down to the low numbers we saw during the pandemic. There is still a predicted almost 7% mortgage rate for the year and seems as if they will only drop to about 6.5% by year's end.
The housing market has seen especially harsh times during the last year. There are very few homes for sale, sellers are reluctant to sell, buyers cannot afford to buy, and mortgage rates are at a 20-year high. Most indicators point to a frozen market. Surely, something has to give.
What are your thoughts on the market? What else would you like to know? Shoot us your thoughts. We plan on sending out these unique market analysis reports regularly to help our agents better grasp what's been going on and more importantly what to expect.
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