Improving Market Sees High Demand for New/Remodeled Homes
After a late 2022 pause sparked by higher interest rates, our market is improving again
May single-family home sales were down 10.4% year-over-year—the lowest rate of decline since June 2022
Compared to pre-pandemic 2019, May sales were down just 1.3%
Compared to 5 years ago (2018), May sales were up 6.4%
Inventory increased in May to 2.8 months supply—still well below a balanced market
New homes are preferred and made up 25% of May sales
Median price is up almost 40% compared to pre-pandemic 2019: $340,095 vs. $249,993
Sellers: Great time to sell new/remodeled homes & now’s the time to update older homes to get them ready for the fall selling season
Buyers: Interest rates likely won’t improve much soon so better to buy now & refinance later
Rising interest rates caused a bit of a downturn in the Houston housing market starting in the fall of 2022, but the market is now improving again, even if the headlines may not reflect that improvement just yet.
Expect to see positive headlines in the fall, when year-over-year sales will be compared to sales during that aforementioned downturn. That will help contribute to a strong market during the fall selling season. Buyers should consider buying now, ahead of the anticipated fall frenzy. We don’t expect interest rates to drop significantly anytime soon so buyers don’t stand to benefit from waiting for lower rates. Better to buy now and refinance later.
While improving, when compared to a normal year, our inventory is still historically low. For reference, we had 20,097 active listings this May (2023) vs. 28,925 active listings in pre-pandemic May (2019). Because many homeowners are wary of trading their low interest rate for a higher one, inventory will continue to remain low. With demand for new/remodeled homes greater than ever, it’s a fantastic time for owners of those homes to sell. Owners of older homes who are interested in selling should consider certain renovations before putting their homes on the market.