The Houston real estate market had a robust performance in April, however, for the first time in 2022, sales volume failed to best last year’s historic pace as record high prices, rising interest rates and limited inventory weighed on homebuyers during what is traditionally the busy spring homebuying season.
Record pricing again! interest rates Rise and low inventory still hard on homebuyers
On a year-to-date basis, however, the market has kept the momentum of what has so far been a strong year – running 7.4 percent ahead of 2021’s record-setting volume. Would-be homebuyers who have instead opted to rent drove single-family home leases up 17.2 percent but pulled back a bit from townhome and condominium leases, which fell 3.0 percent.
The $250,000 to $500,000 housing segment came in third place, climbing 13.5 percent. A continued lack of available homes priced below $250,000 has left consumers no choice but to shop for more expensive homes amid rising interest rates or to lease.
Mortgage rates are surging at the fastest pace in 40 years, driven largely by the Federal Reserve’s more aggressive efforts to curb inflation.
After reaching record prices in March, buyers pushed Houston home prices to even higher levels in April.
The average price of a single-family home rose 14.9 percent to $426,061 while the median price jumped 16.6 percent to $343,990.
Pricing for a single-family home in Houston surpassed $400,000 for the first time in March of this year, and now has blown passed the $425K mark
Consumers have become increasingly weary of the buying frenzy, and many are delaying purchases due to rising prices and interest rates. Unfortunately, we do not expect conditions to improve anytime soon.
The ‘Close to Original List Price Ratio’ for single-family homes reached 100.6 percent in April — the highest percentage ever. That means that a majority of buyers paid above list price for homes on the market. The ratio first broke the 100 percent mark last June, and did so again last July, as high dollar buying began to permeate the market.
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April Monthly Market Comparison
Single-family home sales were statistically unchanged year-over-year, however on a year-to-date basis, they are 7.4 percent ahead of last year’s record pace.
With the exception of single-family home sales and pending sales, the monthly market metrics showed positive readings. Active listings (the total number of available properties) rose 5.2 percent.
Months of inventory edged up to a 1.4-months' supply, which is just slightly above the lowest level of all time. (1.3 last month) Over the past year, its highest level was a 1.7-months' supply from July through October of 2021.
Housing inventory nationally stands at a 2.0-months' supply, according to the latest report from the National Association of Realtors (NAR). A 6.0-months' supply is traditionally considered a “balanced market,” in which neither the buyer nor the seller has the upper hand. Single-Family Homes Update Single-family home sales were statistically flat in April with 9,079 units sold across the Greater Houston area compared to 9,100 a year earlier.
Strong sales volume among higher-end homes pushed pricing to historic highs. The median price climbed 16.6 percent to $343,990 while the average price rose 14.9 percent to $426,061. May 2022 Houston market update May 2022 Houston market update
April Monthly Market Houston Comparison
The first time was a month earlier, in March 2022. Days on Market, or the actual time it took to sell a home, dropped from 40 to 33 days.
HAR also breaks out sales figures for existing single-family homes.
Existing home sales totaled 7,296 in April.
That was up 0.8 percent from the same month last year. The average sales price rose 15.3 percent to a record high $429,620 while the median sales price climbed 15.8 percent to $337,500, also an historic high.
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Lease Property Update
Houston’s lease market registered a mixed performance in April. Single-family rental homes benefited strongly from consumers that postponed homebuying plans, rising 17.2 percent year-over-year. Leases of townhomes and condominiums, however, fell 3.0 percent.
The average single-family rent rose 10.2 percent to $2,164 while the average rent for townhomes and condominiums increased 8.4 percent to $1,831.
Remember it is not unusual for prices to go up and is one of the reasons why homeowners have a higher net worth than renters 40 times higher in Fact.