Houston Housing Market Cools in February as Inventory Increases
The Greater Houston housing market saw a slowdown in home sales in February 2025, as rising inventory and economic factors contributed to a more balanced real estate landscape. According to the Houston Association of Realtors (HAR), single-family home sales declined 3.0 percent year-over-year, while inventory levels increased to their highest level since 2011.
Economic concerns such as elevated mortgage rates and inflation have influenced buyer behavior, leading to a shift in the market. The data suggests a cooling period after months of increasing home prices and competitive bidding.
A Market Shift Toward Balance?
“We are seeing a shift to a more balanced market, arguably a buyer’s market, which offers more opportunities for those looking to purchase a home,” said HAR Chair Shae Cottar with LPT Realty. “While economic conditions are influencing buying behaviors and decision-making, the expansion of inventory is providing consumers with a wider selection of homes. Hesitant buyers are turning to rental housing as a practical alternative.”
The rental market experienced an uptick in demand during February, signaling that some potential homebuyers are choosing to rent rather than purchase in the current economic climate. HAR will release its February 2025 Rental Home Update on March 19 to provide further insights.
Mobile Sidebar Ad
February Market Performance by Price Segment
The Houston housing market exhibited varied trends across different price segments:
-
$150,000 - $249,999: Sales increased 2.0 percent, making it the strongest-performing segment.
-
$1 million and above: Luxury home sales rose 1.9 percent.
-
$1 - $99,999: Sales decreased 23.7 percent.
-
$100,000 - $149,999: Sales fell 6.9 percent.
-
$250,000 - $499,999: Sales declined 3.0 percent.
-
$500,000 - $999,999: Sales dropped 5.6 percent.
Home Prices Show Mixed Trends
The median home price declined 1.2 percent to $325,000, marking its first significant drop since November 2023. However, the average home price rose 2.3 percent to $407,538, largely due to continued demand in the luxury housing market, which remains less impacted by mortgage rate fluctuations.
Active single-family home listings increased 33.7 percent from February 2024, with 31,112 available properties, the highest since July 2011, when active listings peaked at 32,096.
(Source: HAR.com)The Days on Market (DOM) slightly increased from 58 to 59 days, while months of inventory climbed to 4.4 months, indicating a shift toward a more balanced market compared to the national inventory level of 3.5 months, as reported by the National Association of Realtors.
Townhome & Condominium Market Update
The townhome and condominium segment saw a notable decline in sales, with transactions dropping 21.9 percent year-over-year. However, prices increased, with the median price rising 4.4 percent to $248,500 and the average price up 11.0 percent to $287,746. Inventory levels for townhomes and condos reached a 6.2-months supply, the highest since June 2012.
Looking Ahead
As the Houston housing market moves into spring, real estate trends will continue to be shaped by economic conditions, mortgage rate fluctuations, and inventory levels. While home prices remain relatively stable, the rise in available properties and shifting buyer behavior suggest that the market is becoming more favorable to buyers than in recent years.
Mobile Sidebar Ad
For those considering entering the market, increased inventory and slowing price growth may present new opportunities for negotiations and selection. Meanwhile, sellers may need to adjust pricing strategies to stay competitive.
Tiffany Krenek has been on the My Neighborhood News team since August 2021. She is passionate about curating and sharing content that enriches the lives of our readers in a personal, meaningful way. A loving mother and wife, Tiffany and her family live in the West Houston/Cypress region.
