Houston Home Inventory At High Levels
The purchase of a home, for most Americans, is the largest single purchase a person will make in their lifetime. Since residences are very personal, many homeowners forget they are investing in a market and like every financial market, the housing market is volatile. Market volatility is driven by many factors, including:
- Housing prices (sellers like the upswing, buyers like the down)
- Mortgage interest rate
- Housing Inventory
- Economic factors, such as inflation
- Current events that might discourage consumer confidence, like wars or pandemics
It is no secret that the real estate market has seen substantial change in the last few years; mortgage interest rates and inventory have been low, leading to an increase in housing prices. However, inflation is spiking, leading to increases in interest rates; the sharp uptick in the housing market is leveling off a little. Here are some indicators in the Houston housing market.
The number of new houses being listed for sale on the local Multiple Listing Service (MLS) is the beginning of the sales process. New listings have decreased slightly compared to last year; from 3,514 new listings in 2021 to 3,104 during the same number of weeks in 2022. The decrease of 11.7% represents a decrease in inventory and affects the future of the local market.
The number of homes withdrawn from the market is also on the rise. The number of listings taken offline has increased by almost 20% over the same time last, from 1,078 in 2021 to 1,289 in 2022. This is often a result of sellers, who thought the selling process would be quick but were disappointed.
Interest in the housing market remains high, but it is hard to compete with the activity of 2021: while the number of showings has fallen off, the number of showings is only 7% down (would change to is down only 7%) from last year’s extraordinary movement. The showings over the first 31 weeks of 2022 were 37,828—very healthy, but for the same time last year, showings were at a clip of 40,656. Open houses, both in-person and virtual, have dropped from 12,242,179 in 2021 to 8,873,523 in 2022, a drop of 28.6%.
Homes under contract but that have not closed are still pending. The number of properties on the pending list began to drop as soon as the mortgage interest rate reached buyers in May 2022, indicating a decrease in housing transactions. Pending listings fell by more than 1,000, a 34.6% decrease over the first 31 weeks of 2022.
The ultimate indicator in the housing market is closings and for the ninth straight week, closings were recorded lower than the same week in 2021. For the week ending August 8th, closings totaled 1,820 compared to 2,345 in the previous year, a 22.4% decrease.
It is important to remember that despite such negative numbers, housing prices remain high. While the housing market might fluctuate, real estate values increase year after year. That makes your purchase of a residential property a very solid investment.
Questions about Houston Home Inventory, We Can Help?
With over 5 decades of experience in the Houston Housing Market, The Matthews Team can help you choose a Houston Real Estate Agent for your next home or property purchase. If you have any questions, give us a call at 281-440-7900 or send us an email. We’re happy to help!