The housing market is still recovering from the mortgage rate instability and is showing some signs of resilience in April, but it is still lower than in April 2022. This is the 13th month in a row that sales volume is behind the previous year and the third month in a row that prices are lower than the previous year’s levels.
The April 2023 Market Update from the Houston Association of Realtors’ (HAR) shows that single-family home sales dropped 18.4 percent year-over-year with 7,310 units sold versus 8,955 in April 2022. However, compared to April 2019, when 7,673 units were sold, sales only dropped 4.7 percent. Also, inventory is stable and much higher than the record lows of 2022, giving buyers more choices as we enter the peak sales season.
All housing segments saw declines in April compared to 2022. Single-family rentals continued to benefit from high consumer demand as many potential homebuyers are still choosing to rent amid ongoing worries about interest rates and inflation. HAR will release its April 2023 Rental Home Update next Wednesday, May 17.
Single-family home prices dropped for only the third time since spring 2020. The average price went down 1.3 percent to $419,929 and the median price went down 3.6 percent to $331,000. That is very different from the record high prices of $438,327 (average) in May 2022 and $353,995 (median) in June 2022.
April Monthly Market Comparison
The Houston market and the U.S. housing market in general are still struggling with the economic uncertainty and the changing mortgage interest rates. This has led to negative sales for 13 months in a row. Compared to last year, single-family home sales fell 18.4 percent in April, but compared to April 2019, before the pandemic, sales only fell 4.7 percent, and compared to April 2018, five years ago, sales rose 3.9 percent.
Total property sales and total dollar volume also declined from last year’s levels, along with single-family pending sales, which went down 2.8 percent. Active listings, or the number of properties available for sale, was 56.2 percent higher than in 2022.
The inventory of homes for sale improved in April, reaching a 2.7-months supply. The national inventory level is 2.6 months, according to the latest report from the National Association of Realtors (NAR). A “balanced market” where neither buyers nor sellers have an edge is usually considered to have a 4.0- to 6.0-months supply of homes.
The number of single-family homes sold in the Greater Houston area in April was 18.4 percent lower than the same month last year, with 7,310 units sold versus 8,955 in 2022. Prices have started to drop after reaching record highs last spring. The average price in April decreased by 1.3 percent to $419,929 and the median price went down by 3.6 percent to $331,000. The last time the Houston housing market saw prices fall was more than two years ago, in February 2023.
To compare with the pre-pandemic situation, April sales were 4.7 percent lower than in April 2019, when 7,673 single-family homes were sold. The median price of $331,000 in April 2023 is 35.1 percent more than in 2019 ($245,000) and the average price of $419,929 is 35.2 percent more than in 2019 ($310,432). Sales are 3.9 percent higher than they were in April 2018, five years ago, when 7,035 homes were sold. At that time, the median price was $240,000 and the average price was $304,890.
It took longer to sell a home in April, with the Days on Market rising from 34 to 55 days. The inventory of homes for sale also increased from 1.3 months to 2.7 months. The national inventory level is 2.6 months, according to NAR.
Broken out by housing segment, April sales performed as follows:
- $1 - $99,999: decreased 36.4 percent
- $100,000 - $149,999: decreased 30.3 percent
- $150,000 - $249,999: decreased 12.2 percent
- $250,000 - $499,999: decreased 19.7 percent
- $500,000 - $999,999: decreased 22.0 percent
- $1M and above: decreased 22.4 percent
The sales of existing single-family homes are also reported by HAR. In April, 5,391 existing homes were sold, which is 24.5 percent lower than the same month last year. The prices of existing homes also dropped. The average price decreased by 3.0 percent to $415,699 and the median price went down by 4.8 percent to $320,000.
The number of townhouses and condos sold in April was 33.2 percent lower than the same month last year, marking the 11th month in a row of falling sales. Only 544 units were sold, compared to 814 in April 2022. The average price increased slightly by 1.7 percent to $279,257, while the median price stayed the same at $234,000. Both prices are lower than the record highs set in April 2022. The supply of townhouses and condos went up from 1.3 months to 2.4 months.
Townhome and condominium sales were down 9.6 percent compared to pre-pandemic April 2019, when 602 units sold. $203,335, the average price back then, was 37.3 percent lower and the median price was 44.4 percent lower at $162,000.
Houston Real Estate Highlights in April
- Single-family home sales were down 18.4 percent year-over-year, as prospective homebuyers pull back their purchase plans amid mortgage rate fluctuations;
- Compared to pre-pandemic 2019, single-family home sales were down 4.7 percent, however they were up 3.9 percent versus the volume five years ago, in April 2018;
- All housing segments experienced sales declines;
- Days on Market (DOM) for single-family homes rose from 34 to 55 days;
- Total property sales fell 20.7 percent with 8,912 units sold;
- Total dollar volume dropped 19.7 percent to $3.6 billion;
- The single-family median price dropped 3.6 percent to $331,000;
- The single-family average price fell 1.3 percent to $419,929;
- Single-family home months of inventory registered a 2.7-months supply, up from 1.3 months a year earlier;
- Townhome/condominium sales experienced their 11th straight monthly decline, falling 33.2 percent, with the median price flat at $234,000 and the average price up 1.7 percent to $279,257;
- Compared to pre-pandemic 2019, townhome and condominium sales were down 9.6 percent.