Demand for rental properties remains strong; inventory reaches a five-month high
HOUSTON — (April 10, 2019) — Lower interest rates pushed fence-sitters into buying mode as single-family home sales rose nearly five percent in March compared to a year earlier. The strongest sales activity was recorded among homes priced between $250,000 and $500,000, followed closely by the luxury segment ($750,000 and above). Once again, renters placed strong demand on single-family and townhome/condo leases across greater Houston. Housing inventory expanded to its highest level in five months, laying fertile ground for consumers as we move further into the spring buying season.
According to the latest monthly report from the Houston Association of Realtors® (HAR), sales of single-family homes increased 4.9 percent in March, with 7,072 homes sold versus 6,740 in March of 2018. Home sales edged up slightly in February following three consecutive months of declines.
Prices of single-family homes reached record highs for a March. The median price (the figure at which half of the homes sold for more and half sold for less) rose 2.1 percent to $240,000 and the average price was up 2.0 percent at $298,766.
March sales of all property types totaled 8,475, up 3.6 compared to the same month last year. Total dollar volume for the month jumped 5.7 percent to $2.4 billion.
“Home sales are benefitting from some of the lowest interest rates in years, but we also continue to see tremendous strength in the rental segment, and with inventory growing steadily, the Houston real estate market looks solid,” said HAR Chair Shannon Cobb Evans with Heritage Texas Properties. “We are also encouraged by the Texas Workforce Commission’s latest report about a 2.4-percent increase in employment across metro Houston over the past year, which bodes well for housing.”
Lease Property Update
Consumer demand for lease properties was up dramatically again in March compared to a year prior. Single-family home rentals shot up 18.4 percent while rentals of townhomes and condominiums jumped 16.7 percent. The average rent for single-family homes was flat at $1,746 while the average rent for townhomes and condominiums rose 2.0 percent to $1,530.
March Monthly Market Comparison
The Houston real estate market registered across-the-board gains in March. Single-family home sales, total property sales, total dollar volume and pricing were all up compared to March 2018. Month-end pending sales of single-family homes totaled 8,740, a 14.6 percent increase over last year. Total active listings, or the total number of available properties, jumped 17.5 percent to 41,127.
Single-family homes inventory reached a 3.9-months supply in March. That is up from 3.3 months a year earlier and marks the greatest supply of homes since October 2018. For perspective, housing inventory across the U.S. is currently at a 3.5-months supply, according to the latest report from the National Association of Realtors® (NAR).
Single-Family Homes Update
Single-family home sales climbed 4.9 percent in March, with 7,072 units sold across the greater Houston area versus 6,740 a year earlier. This marks the second consecutive month of positive sales activity. A small increase in February (1.4 percent) reversed three straight months of declines.
Prices reached the highest levels ever for a March. The median price increased 2.1 percent to $240,000. The average price rose 2.0 percent to $298,766.
Days on Market (DOM), or the number of days it took the average home to sell, was unchanged at 64 days. Inventory grew to a 3.9-months supply. That is up from 3.3 months a year earlier and represents the greatest supply since October 2018. It is also slightly above the national inventory of 3.5 months reported by NAR.
Broken out by housing segment, March sales performed as follows:
HAR also monitors sales activity among existing single-family homes. Existing home sales totaled 5,676 in March, up 5.2 percent versus the same month last year. The average sales price increased 2.7 percent to $286,868 while the median sales price rose 2.3 percent to $225,000.
Townhomes and condominiums remain a challenged segment of the Houston housing market. March brought the seventh straight month of declining sales, down 9.2 percent, with 551 units sold compared to 607 a year earlier. The average price was statistically flat at $211,241 while the median price rose 2.8 percent to $174,750. Inventory grew from a 3.6-months supply to 4.4 months.
Houston Real Estate Highlights in March