Houston Market Update December 2024

After two consecutive years of declining sales, the Houston housing market saw a welcome shift in 2024, with modest growth and increased stability. Despite ongoing challenges such as fluctuating mortgage rates and higher home prices, the market remained active, thanks to strong demand from homebuyers and expanding inventory. As we enter 2025, all signs point to continued growth and opportunities for both buyers and sellers in the Greater Houston area.

2024 Houston Housing Market Overview

According to the Houston Association of Realtors (HAR) December/Full-Year 2024 Housing Market Update, Houston's housing market experienced positive trends in key areas despite some volatility. While total property sales remained flat compared to 2023, single-family home sales saw a 1.3% increase, with 85,163 homes sold in 2024. Total dollar volume for the year reached $41.1 billion, a 3.1% rise from the previous year’s $39.8 billion.

In December 2024, the housing market capped off the year with a strong performance, thanks to a significant 16.3% year-over-year increase in single-family home sales. This was fueled by a sharp rise in activity within the luxury home segment—homes priced at $1M or higher—which saw an impressive 64.6% boost in sales compared to December 2023.

Insights from HAR Chair Shae Cottar

HAR Chair Shae Cottar with LPT Realty noted that “2024 brought a welcomed balance to the Houston housing market,” despite challenges from higher mortgage rates. She emphasized that the market’s resilience was particularly notable given its performance compared to other regions in the U.S. Expanding inventory and steady sales activity in 2024 provide a solid foundation for a promising year ahead for both buyers and sellers in 2025.

Key 2024 Market Trends

1. Sales Volatility and Rate Adjustments

While the first half of 2024 saw fluctuating home sales, the market found its rhythm as the Federal Reserve implemented three rate cuts to combat inflation. These cuts gave homebuyers a boost of confidence, although mortgage rates remained high. By the latter half of 2024, sales began to surpass 2023 levels, particularly from September through December.

2. Increasing Inventory

Inventory levels throughout the year steadily grew. At the beginning of 2024, the supply of homes was at 3.2 months, but by August through November, it had risen to 4.4 months. December ended with 4.0 months of inventory available, signaling a more balanced market—a sign of opportunity for both buyers and sellers.

3. Home Prices Reach New Highs

Home prices reached record levels in 2024. In July, the average price of a home in Houston hit $443,362, surpassing the previous high from May. While prices eased slightly toward the end of the year, with the average price at $425,150 in December, they still marked a 2.5% increase year-over-year. The median price also rose by 1.5%, closing 2024 at $335,000.

December Market Highlights

December was a strong month for the Houston real estate market, with key metrics showing continued growth:

• Single-family home sales jumped 16.3% year-over-year, reaching 7,162 units sold.
• The median price for single-family homes increased by 1.3% to $334,290, while the average price saw a 5.0% rise, reaching $425,150.
• Active listings were up 21.6% compared to December 2023, with a total of 45,714 available properties.
• Total dollar volume for December rose 20.5% to $3.5 billion, reflecting the increase in sales and home prices.

The townhome and condominium market saw a slight decline in sales volume by 5.8%, with 389 units sold. However, prices still rose modestly, with the average price of townhomes and condos increasing by 2.5%, to $268,152.

What’s Ahead for 2025?

Looking ahead to 2025, Houston’s housing market is poised to continue its growth, supported by a steady demand for homes and a greater selection of properties for buyers to choose from. With inventory levels at a healthy 4.0 months supply and home prices stabilizing after a record-setting year, both homebuyers and sellers can expect a balanced market, where neither has an overwhelming advantage.

As Shae Cottar suggested, despite the challenges of fluctuating mortgage rates, the Houston market has shown remarkable resilience and is expected to remain strong throughout 2025. Whether you're looking to buy or sell, Houston’s housing market offers great opportunities this year, making it a promising time to get involved.

2024 Highlights at a Glance:

• Single-family home sales: 85,163 units sold (+1.3% from 2023)
• Total dollar volume: $41.1 billion (+3.1%)
• Average single-family home price: $425,150 (+5.0%)
• Median single-family home price: $334,290 (+1.3%)
• Active listings in December: 45,714 units (+21.6%)
• Inventory levels: 4.0-months supply (balanced market)

The future looks bright for the Houston housing market as we head into 2025, with steady demand, expanding inventory, and a more balanced approach to pricing and inventory. Whether you’re a prospective homebuyer or seller, the market holds potential for success in the coming year.