For the second year in a row, housing inventory, interest rates, inflation and economic uncertainty caused disruption to the Houston area housing market. In 2023, we saw housing inventory grow, single-family home prices remain flat and interest rates jump to 20-year highs. The rising interest rates proved to be a deterrent for buyers.
The Houston housing market faced another turbulent year in 2023 as rising interest rates and economic uncertainty deterred buyers for the second consecutive year. Single-family home sales dropped 12% while total property sales fell 13.1% compared to 2022, signaling disruption across the market. December brought a 6.2% year-over-year decline in single-family home sales, capping off a slow end to the year.
After starting 2023 with just 2.6 months of inventory, the supply of single-family homes swelled to 3.5 months in October and November – the highest level since November 2019’s 3.6 months. By December, inventory settled at 3.3 months, on par with the 3.5-month national supply according to the National Association of Realtors. With growing inventory, days on market also increased, ranging from 42-63 days in 2023.
While single-family home prices remained relatively flat in 2023, the sharp rise in interest rates proved deterrent enough to stall the market. Hopefully, 2024 will bring more economic certainty and consumer confidence.
The Texas A&M Real Estate Research Center Forecast is included in our full newsletter. For reference, 2022 end-of-year data can be found here.