The Houston housing market is expected to continue moderating through the end of 2023 as it transitions from a seller's market to a more balanced market. Home price appreciation will likely slow to the 5-7% range, providing some relief for buyers while still remaining relatively competitive.
While competition for homes will ease compared to the frenzy of 2021-2022, buyers can still expect multiple offers and homes selling quickly if priced correctly. Demand is expected to remain healthy thanks to a growing population and strong job market. Overall, the Houston housing market will likely see a cool-down while remaining relatively vibrant for both buyers and sellers for the remainder of 2023.
Now that we are well into 2023, we can see how the numbers are looking for the month of July.
Our internal numbers in 2022 & 2023 compared:
*Includes adjustment for larger client base
The housing market avoided a crash that some experts had feared. Zillow predicts that prices will go back to rising steadily, calling for a 5.5% gain in 2023. However, affordability issues persist. Despite slower price gains, mortgage rates near 6.5% mean homes remain unaffordable for many buyers, especially first-time buyers.
Economic uncertainty continues to loom. Recession risks cloud the outlook and may further dampen buyer demand, but the labor market remains strong for now.
As we have discussed before, Millennial homebuyers have made a dent. Their migration to certain metro areas continue to provide a demographic tailwind.
According to the National Association of Realtors (NAR), the median existing-home sales price also surpassed $400,000 for the first time in 2023, reaching $410,200 - the second-highest price ever recorded - and is currently on pace to break the all-time high of $413,800 set in June of 2022.
Existing monthly house sales, however, fell by 3.3%, with sales falling in all four of the major U.S. regions on a yearly basis.
Despite rising mortgage rates, the market is nevertheless highly competitive because of high consumer demand and a limited supply of available properties, in part because homeowners who bought houses at historically cheap interest rates in recent years have decided to stay put. These and other elements combine to create the ideal affordability problem storm that keeps many would-be homeowners at a disadvantage.
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.