Low mortgage rates and a growing supply of properties on the market propelled Houston-area home sales to a record in July with the bulk of the activity taking place among the area’s moderately priced homes.
Buyers last month closed on 8,953 single-family homes here, beating the previous high of more than a year ago by 568 sales, according to the Houston Association of Realtors. Sales jumped nearly 12 percent from July 2018, one of the biggest year-over-year sales increases in years. Upwards of three-quarters of the of the homes that sold last month were priced below $400,000.
“The real sweet spot is between $150,000 and $350,000,” said James Gaines, chief economist at the Real Estate Center at Texas A&M University.
Sales are up in neighborhoods throughout the Houston region, from Richmond to League City and the Heights to the Hobby area. “People are buying and selling,” Gaines said.
The Houston housing market in recent has been held back by tight inventory of homes on the market, making it harder for willing buyers to find properties. Inventories are growing, but they remain tight.
One key measure, called months inventory — the time it would take to sell all the properties on the market — rose to 4.3 months in July from 4.1 months a year earlier. But that’s still well below the six months considered a balanced market.
The number of homes on the market continues to grow, too. Active listings in July rose to 30,295 up from 30,246 last month and 27,682 in July 2018.Over the year, listings are up 9 percent.
Inventory varies significantly by price segment. The market for $1 million-and-up homes had a nearly 13-month supply in July. The segment just below that — homes in the $750,000 to $1 million range — had a 10-month supply.
All segments under $400,000 had a lower than six-month supply, indicating sellers generally have the upper hand in negotiations. That has helped push prices higher.
The median home price in metropolitan Houston rose to $250,000, up 2.2 percent from a year ago, but short of June’s record of $252,500, according to the Realtors’ association.
“July was a strong month for home sales and rentals across the Houston area,” Shannon Cobb Evans, the association's chair, said in the report released Wednesday. “We believe that the Houston real estate market is on track for another record year, and that is directly attributed to a healthy local economy, low mortgage interest rates and an improving supply of homes.”
The average 30-year fixed-rate mortgage was 3.6 percent in the latest survey from Freddie Mac. That’s down from 4.6 percent last year at this time.
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