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HOUSTON — (March 8, 2023) — As the Houston housing market continues to transition to pre-pandemic conditions, positive indicators are beginning to blossom. While February sales were down year-over-year, they were up compared to the last pre-pandemic February, in 2019. In addition, year-over-year pricing fell for the first time in more than two years and more homes were listed for sale. These are among the signs that would-be homebuyers have anticipated after moving to the sidelines last year when mortgage interest rates began to rise.

According to the Houston Association of Realtors’ (HAR) February 2023 Market Update, single-family home sales fell 23.0 percent, with 5,723 units sold compared to 7,430 in February 2022. That marks the 11th consecutive monthly decline. However, when compared to the last February before the pandemic – February of 2019, with sales volume of 5,339 units – sales were up 7.2 percent.

All housing segments saw year-over-year declines in February. By contrast, both single-family and townhome/condominium rentals had solid gains, with buyers pivoting to the rental market until mortgage rates ease and inflation subsides. HAR will issue its latest report on rental trends in the February 2023 Rental Home Update, to be released next Wednesday, March 15.

“For a true apples-to-apples comparison of the Houston housing market, you have to examine where we were before the pandemic, in 2019, and by that standard, we are in similar territory,” said HAR Chair Cathy Treviño with Side, Inc. “The traditional year-over-year comparison shows a market slowdown, but even then, there are positive trends in the form of moderating prices and growing inventory that bode well for spring homebuying.”

Single family home prices fell for the first time since the spring of 2020. The average price dropped 2.4 percent to $385,103 and the median price declined 1.6 percent to $320,000. That is in sharp contrast to when prices reached record highs of $438,294 (average) in May 2022 and $353,995 (median) in June 2022.

February Monthly Market Comparison

February marked the 11th straight month of negative sales as housing here and across the U.S. recovers from potent economic headwinds. Year-over-year single-family home sales fell 23.0 percent, but when compared to February 2019, before the pandemic, sales were up 7.2 percent, and compared to February 2018, five years ago, sales were up 8.7 percent.

The monthly housing measurements for February consist of largely negative readings. In addition to the drop in single-family home sales, total property sales and total dollar volume fell; single-family pending sales dropped 11.0 percent. Active listings (the total number of available properties) remained 69.2 percent ahead of their level a year ago.

Months of inventory continued to improve, growing to a 2.6-months supply in February. Housing inventory nationally stands at a 2.9-months supply, according to the latest report from the National Association of Realtors (NAR). A 4.0- to 6.0-months supply is generally considered a “balanced market” in which neither the buyer nor the seller has an advantage.