Average home prices increased at a slower rate than the previous four months
The Greater Houston housing market cooled in February, with sales moderating as more homes were listed for sale. Economic conditions, including elevated mortgage rates and inflation concerns, are impacting buyer sentiment and contributing to this move toward a more balanced market.
According to the Houston Association of Realtors’ February 2025 Housing Market Update, single-family home sales across the Greater Houston area declined 3.0 percent year-over-year, with 6,050 units sold compared to 6,234 last February. It marks the first decline in sales since August 2024. The number of available homes in the Houston area hit the highest level since 2011, with 31,112 active listings in February.
The median home price declined 1.2 percent to $325,000, which is the first notable decline since November 2023. The average price increased slightly to $407,538. This was largely due to continued activity at the high end of the market, which is less susceptible to interest rate changes.
The segment of the market comprised of homes priced between $150,000 and $249,999 saw the strongest performance with sales up 2.0 percent compared to last year. The luxury segment ($1 million+) followed with a 1.9 percent increase in transactions. Sales declined across all other housing segments in February.
“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.”
February Monthly Market Comparison
February marked the first time total property sales were in negative territory since September 2024 as housing in Houston and across the U.S. feel the impacts from economic headwinds. Total property sales declined 4.7 percent year-over-year. Total dollar volume was statistically flat at $2.8 billion. Active listings, or the total number of available properties, rose 26.7 percent compared to last February.
For HAR’s Monthly Activity Snapshot (MAS) of the February 2025 trends, please click HERE to access a downloadable PDF file.
Single-Family Homes Update
February marked the first decline in sales of single-family homes in six months. Sales in the Houston area were 3.0 percent below last year’s volume, with 6,050 units sold compared to 6,234 during the same time in 2024.
The average home price rose 2.3 percent year-over-year to $407,538, representing a slower rate of growth compared to the previous four months. The median price was down 1.2 percent, which is the biggest decline in 15 months, to $325,000. The price per square foot increased to $174 from $172 last February.
Active listings were 33.7 percent above 2024 levels with 31,112 available properties. This is the highest volume of available homes since July 2011 when there were 32,096 units.
Days on Market, or the actual time it took to sell a home, increased from 58 to 59 days. Months of inventory improved to a 4.4-months supply from 3.3 months last February, indicating a more balanced market. The national supply stands at 3.5 months, according to the National Association of Realtors.
Broken out by housing segment, February sales performed as follows:
- $1 – $99,999: decreased 23.7 percent
- $100,000 – $149,999: decreased 6.9 percent
- $150,000 – $249,999: increased 2.0 percent
- $250,000 – $499,999: decreased 3.0 percent
- $500,000 – $999,999: decreased 5.6 percent
- $1M and above: increased 1.9 percent
HAR also breaks out sales figures for existing single-family homes. In February, existing home sales totaled 3,876, which is down 4.1 percent compared to the same time last year. The average price rose 4.3 percent to $421,111, and the median sales price was statistically flat at $325,000.
Townhouse/Condominium Update
After a strong start to the new year, townhome and condominium sales declined in February. Sales fell 21.9 percent year-over-year with 321 closed sales versus 411 a year earlier. The average price rose 11.0 percent to $287,746, and the median price increased 4.4 percent to $248,500.
The inventory of townhomes and condominiums expanded from a 3.9-months supply last February to 6.2-months, which is the highest level since June 2012 when there was a 6.3-months supply.
Houston Real Estate Highlights for February
- Single-family home sales declined 3.0 percent year-over-year;
- Days on Market (DOM) for single-family homes went from 58 to 59 days;
- Total property sales were down 4.7 percent with 7,202 units sold;
- Total dollar volume was statistically flat at $2.8 billion;
- The single-family median price declined 1.2 percent to $325,000;
- The single-family average price rose 2.3 percent to $407,538;
- Single-family home months of inventory registered a 4.4-months supply, up from 3.3 months last February.
- Townhome/condominium sales declined 21.9 percent year-over-year. The median price increased 4.4 percent to $248,500, and the average price rose 11.0 percent to $287,746.
