HOUSTON/HAR Report — (August 10, 2022) — The frenetic pace of home sales that dominated the Houston housing market throughout most of the pandemic continues to slow its roll. Some consumers, facing record pricing, rising interest rates and limited inventory, have moved to the sidelines or opted to rent. Home sales experienced their fourth consecutive monthly decline in July, while new listings buoyed inventory to the highest level in two years.

According to the Houston Association of Realtors’ (HAR) July 2022 Market Update, single-family home sales dropped 17.1 percent, with 8,370 units sold compared to 10,102 in July 2021. That is the lowest one-month sales volume since January 2022. On a year-to-date basis, the market is now trailing 2021’s record-setting pace by 1.3 percent. 

The only housing segment that did not experience negative sales in July was the $500,000 to $1 million segment, which rose 10.1 percent. The smallest decline in sales was registered among homes priced between $250,000 and $500,000, which fell 9.2 percent. With a scant assortment of homes priced below $250,000, consumers have had to weigh more expensive property options, shift their focus to rental homes or postpone buying or renting plans altogether. [HAR’s Monthly Rental Home Update for July will be released next Wednesday, August 17]. 

“The scorching pace of Houston housing throughout most of the pandemic was completely unsustainable, so the cooling that we have experienced over the past four months was expected and is all part of a market normalization,” said HAR Chair Jennifer Wauhob with Better Homes and Gardens Real Estate Gary Greene. “As long as we continue to see inventory grow and prices level off, I believe homebuyers will move off the sidelines and back into the marketplace. An easing of interest rates would help as well, particularly for first-time buyers who desperately want to seize the American Dream of homeownership.” 

The average price of a single-family home rose 9.9 percent in July to $426,494 – well below the record high of $438,844 reached in May 2022. The median price jumped 12.7 percent to $348,740, which is well below highest median of all time, $354,613, reached last month. The average price for a single-family home in Houston first broke the $400,000 mark in March of this year. The median price has remained above $300,000 since May of 2021.