HAR: The latest market update

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’ July Market Update, single-family home sales dropped 17.1 percent, with 8,370 units sold compared to 10,102 in July 2021.

The only housing segment that excelled in July was the $500,000 to $1 million segment, which lept 40.6 percent. The smallest decline in sales was registered among homes priced between $250,000 and $500,000, which fell 9.2 percent. With a low assortment of homes priced below $250,000, consumers may have had to weigh more expensive property options, shift their focus to rental homes or postpone buying or renting plans altogether.

“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 home buyers 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.

After surpassing the 100-percent mark for three straight months, the “Close to Original List Price Ratio” for singlefamily homes fell to 98.9 percent in July. A reading above 100 percent signals that a majority of buyers paid above list price for homes on the market.

With prospective home buyers facing record prices, rising interest rates and a limited supply of homes on the market on top of general consumer inflation, home sales were down again in July. Single-family home sales fell 17.1 percent. On a year-to-date basis, sales are 1.3 percent behind last year’s record pace. July housing measurements generated mixed readings. Total property sales experienced declines and pending sales slid 12.5 percent. Active listings (the total number of available properties) jumped 30 percent, but total dollar volume fell 9 percent to $4.1 billion. Months of inventory grew again in July, reaching a 2.5-month supply.

Strong sales among higher-end homes pushed pricing up again. The median price climbed 12.7 percent to $348,740 while the average price rose 9.9 percent to $426,494. By housing segment, sales performed as follows: • $100,000 - $149,999: decreased 34.9 percent

• $150,000 - $249,999: decreased 49.6 percent

• $250,000 - $499,999: decreased 9.2 percent

• $500,000 - $999,999: increased 40.6 percent

• $1M and above: decreased 52.5 percent.