2023 Annual Market Comparison-HAR Report
Rising mortgage rates were the primary deterrent to homebuying throughout 2023, with some consumers scrapping plans to purchase a home and many others opting to rent instead. Houston real estate kicked off the year with double-digit declines in sales volume that began to ease by the spring. Slower sales combined with a steady influx of new listings enabled inventory to grow and eventually match healthier 2019 and 2020 levels. By October, as the Fed continued its efforts to stave off inflation, mortgage rates climbed to levels not seen in 20 years when they exceeded 8 percent. Despite that, and just in time for the holidays, home sales registered a 4.7 percent increase in November – the first increase the market had seen in 19 months, but not enough to prevent 2023 from becoming the second consecutive down year.
At the outset of 2023, inventory was at a 2.6-months supply. In October and November, it grew to a 3.5-months supply, the greatest level since November 2019 when the market had a 3.6-months supply. In December, inventory registered a 3.3-months supply. A 4.0- to 6.0-months supply has traditionally been considered a “balanced market” in which neither buyer nor seller has an advantage.
June scored the year’s greatest sales volume with 8,723 single-family units sold during the month. By the time the books were closed on December transactions, 83,854 single-family homes had sold across greater Houston in 2023. That is down 12.0 percent from the 95,302 homes sold in 2022.