Jan 18, 2024 - Real Estate

What 2024 holds for Houston real estate

Animated illustration of a real estate sign with the year 2023 on it flipping over to reveal the year 2024.

Illustration: Brendan Lynch/Axios

Local real estate experts predict Houston's housing market will continue to stabilize but affordability and home sales will remain a concern in 2024.

Why it matters: For the second straight year, single-family home sales declined as potential buyers turned to renting while waiting for mortgage rates to drop, per a new Houston Association of Realtors report.

Yes, but: The housing market is not as volatile as it was in 2021 and has more inventory, similar to healthier 2019 and 2020 levels.

  • In December, inventory registered a 3.3-month supply, up from the 2.6-month supply in December 2022.

By the numbers: Single-family home sales in Houston for all of 2023 totaled 83,854, down 12% from 2022.

  • The single-family average sales price remained steady at around $412,000, while the median cost dropped 2.5% to $330,000, per the HAR report.

What they're saying: "It is disappointing to have a down year for home sales, but the economic forces affecting Houston affected housing markets across the U.S., so this was not a uniquely Houston situation," HAR chair Thomas Mouton said.

  • "We believe that home sales will pick up once consumer confidence is restored, and that depends on what the Federal Reserve does with interest rates and evidence that inflation is no longer a threat."

What to expect: Despite the prices of homes not drastically increasing, affordability remains a concern, especially with increasing insurance rates. Katy, New Caney, Kingwood and La Porte remain popular markets as people move to more affordable suburbs, per Mouton.

  • Buyers who held off purchasing a home last year, along with sellers who now have "golden handcuff" fatigue, will likely be ready to make changes in their housing situation.

The bottom line: People are tired of waiting, Mouton says, so he expects more people will bite the bullet for their dream home now and look to refinance in the future for lower mortgage rates.

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