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Consumers drive sales volumes to near-record levels as interest rates stay low
HOUSTON — (September 11, 2019) — Temperatures weren’t the only thing soaring in August. Home sales registered another hot month, as low mortgage interest rates kept consumers in a buying mood. According to the latest monthly report from the Houston Association of Realtors (HAR), August sales of single-family homes throughout greater Houston totaled 8,679. That is up 3.9 percent year-over-year and marks the second largest one-month sales volume of all time; the record of 8,930 was set just last month. On a year-to-date basis, home sales are running 3.1 percent ahead of 2018’s record volume.
Homes in the $250,000 to $500,000 range scored the greatest sales gains, up 14.7 percent compared to August 2018. Next were homes in the $500,000 to $750,000 range, which rose 7.0 percent. The luxury segment, which encompasses homes priced from $750,000 and up, fell 3.0 percent.
The median price of a single-family home (the figure at which half of the homes sold for more and half sold for less) reached the highest level ever for an August, climbing 4.5 percent to $249,000. The average price also achieved an August record, rising 3.4 percent to $310,409.
Housing inventory still remains ahead of 2018 levels. It reached a 4.2-months supply in August compared to 4.0 months a year earlier. So far in 2019, June and July marked the peak of inventory – a 4.3-months supply. Robust inventory and mortgage interest rates currently averaging 3.49 percent (according to Freddie Mac) have created a favorable climate for home buyers and paved the way for one of the strongest summers in Houston real estate history.
Sales of all property types increased 4.1 percent in August, totaling 10,375 units. That marks the second highest one-month volume of all time. The record for total property sales in a single month was 10,444 set just last month, in July 2018, which also was the first time that figure broke the 10,00 mark. Total dollar volume for the month climbed 6.6 percent to $3.1 billion.
“This has been one of the hottest summers in Houston history, both in terms of temperatures and home sales,” said HAR Chair Shannon Cobb Evans with Better Homes and Gardens Real Estate Gary Greene. “The Houston real estate market typically slows a bit once school starts and we get into fall, but with interest rates as low as they’ve been and a steadily growing supply of homes, it’s possible that sales don’t let up until closer to the holidays. The rental segment has also been extremely active and looks to remain that way a while longer.”
Lease Property Update
August proved a solid month for Houston-area rental properties. Single-family home rentals jumped 7.6 percent while rentals of townhomes and condominiums rose 6.3 percent. The average rent for single-family homes was flat at $1,914 and the average rent for townhomes and condominiums was also unchanged at $1,645.
August Monthly Market Comparison
The Houston housing market registered across-the-board gains in August. Single-family home sales, total property sales, pricing, total dollar volume and inventory all increased compared to August 2018. Month-end pending sales of single-family homes totaled 8,547, a 16.8 percent increase over last year. Total active listings, or the total number of available properties, rose 8.2 percent to 45,062.
Single-family homes inventory expanded to a 4.2-months supply in August. That compares to 4.0 months a year earlier and is only slightly below the 2019 peak of 4.3-months supply reached in June and July. For perspective, housing inventory across the United States also currently stands at a 4.2-months supply, according to the latest National Association of Realtors (NAR) report.
Single-Family Homes Update
August was another strong month for single-family home sales, which rose 3.9 percent with 8,679 units sold across greater Houston compared to 8,355 a year earlier. That represents the second largest one-month sales volume of all time. On a year-to-date basis, sales are running 3.1 percent ahead of 2018’s record pace.
Home prices climbed to the highest levels ever for an August. The median price was $249,000, up 4.5 percent from August 2018. The average price rose 3.4 percent to $310,409.
Days on Market (DOM), or the number of days it took the average home to sell, was 52 compared to 49 a year ago. Inventory expanded to a 4.2-months supply. That is up from 4.0 months year-over-year and is just under the 2019 peak of 4.3 months reached in June and July. It matches the national inventory of 4.2 months reported by NAR.
Broken out by housing segment, August sales performed as follows:
HAR also breaks out sales activity for just existing single-family homes. Existing home sales totaled 7,251 in August, up 3.9 percent versus the same month last year. The average sales price rose 4.0 percent to $301,695 while the median sales price increased 4.7 percent to $235,500.
The townhouse and condominium segment continues to experience sales ups and downs throughout 2019. After a 14.6 percent year-over-year increase in July, August sales fell 2.9 percent, with 641 units sold compared to 660 in August 2018. The average price was unchanged at $209,075 while the median price rose 3.9 percent to $172,500. Inventory grew from a 4.2-months supply to 4.7 months.
Houston Real Estate Highlights in August