Houston Housing Market Insight: October 2024

The Houston real estate market continues to thrive, even as mortgage rates have risen over recent months. According to the Houston Association of Realtors (HAR), October 2024 saw a strong showing in both home sales and inventory, signaling a resilient market as the final quarter of the year kicks off.

Single-Family Home Sales Surge

In October 2024, single-family home sales across the Greater Houston area jumped by 12.8% year-over-year, with a total of 7,185 homes sold compared to 6,372 in October 2023. This uptick in sales reflects a steady demand for homes, despite the uptick in mortgage rates earlier this year.

Average Home Price:

• The average price for a home in Houston rose by 5.2% to $423,166.
• The median price also saw an increase of 2.7%, climbing to $334,900.

These price increases highlight the continued strength of the Houston market, especially in the more affordable and mid-range segments.

Luxury Market Outpaces Other Segments

One of the most notable trends in the October 2024 data was the surge in sales in the luxury home market. Homes priced over $1 million saw a 33.8% increase in sales, making it the fastest-growing segment in terms of transaction volume. Similarly, homes priced between $500,000 and $999,999 also performed strongly, with a 25.9% increase in sales.

On the other hand, homes priced between $100,000 and $149,999 experienced a 7.3% decline in sales, reflecting the ongoing affordability challenges in the lower price range.

Inventory Continues to Rise

As of October 2024, there were 31,094 single-family homes on the market, which is a 23.6% increase compared to last year. This expanded inventory is helping to meet demand and provide more options for buyers. Additionally, the months of inventory for single-family homes increased from 3.5 months last October to 4.4 months in October 2024— the highest level since 2012.

According to HAR, a 4.0- to 6.0-month supply is considered a “balanced market”, where neither buyers nor sellers have a significant advantage. Houston's inventory level suggests that the market is shifting toward balance, providing more breathing room for buyers.

Steady Rentals and Strong Dollar Volume

The rental market for single-family homes remained steady in October, with no significant changes reported in rental demand. HAR’s rental update, due out on November 20, 2024, will provide further insight into this segment.

As for overall market activity, total property sales for October 2024 increased by 10.2% compared to last year, with 8,627 units sold. The total dollar volume of sales jumped by 19.5%, reaching $3.5 billion in October alone.

A Glimpse into Townhomes and Condominiums

For the first time since October 2022, townhomes and condominiums in Houston saw a positive trend, with sales rising 6.5% year-over-year to 489 units. While the median price for townhomes and condos declined by 3.2%, dropping to $232,400, the average price increased by 2.6% to $279,018.

The inventory for townhomes and condominiums also expanded significantly, with the months of inventory reaching 5.9 months, the highest level since 2012. This suggests a healthy level of supply relative to demand in the condominium market.

What’s Driving the Market in Houston?

Despite the rising mortgage rates, which had peaked in 2023, current rates remain favorable enough to sustain buyer demand in the Houston market. According to Thomas Mouton, HAR Chair and real estate expert with Century 21 Exclusive Properties, “This more favorable rate environment is helping sustain buyer demand and driving continued activity in the Houston housing market.”

Whether it’s the strength of the luxury segment or the ongoing availability of homes at various price points, the Houston housing market remains active, with a positive outlook heading into the final months of 2024.

Key Takeaways from the October 2024 Houston Market Update:

• Single-family home sales rose 12.8% year-over-year.
• Average home prices climbed 5.2% to $423,166.
• Luxury home sales increased by 33.8% for homes priced at $1M+.
• Overall, total property sales grew by 10.2%, with a total dollar volume of $3.5 billion.
• The market saw a healthy 4.4-month inventory of single-family homes, signaling a balanced market.

As the Houston real estate market continues to thrive, both buyers and sellers have reasons to feel optimistic about the opportunities in the final quarter of the year. Whether you're looking to buy or sell, the city's housing market shows no signs of slowing down any time soon.