Oil prices are down, the stock market is in flux, and mortgage rates are higher. But the Houston housing market keeps chugging along.
Home sales in 2018 again shattered sales and price records, even as once white-hot markets in other parts of the country softened. Despite the lingering effects of Hurricane Harvey, rising mortgage rates and growing concerns about a slowing national economy, home sales in Houston ended the year nearly 4 percent above the previous record, set in 2017, while the median sales price climbed to $237,500, 3 percent above the previous record, the Houston Association of Realtors reported Wednesday.
The combined value of more than 82,000 homes sold last year soared to $28 billion, up more than 20 percent from 2017.
The region’s housing market has proved itself remarkably resilient in recent years, powering through the last oil bust with rising sales and prices with the help of a growing population, a diversifying local economy and a strong national one. But real estate analysts and agents say the record run may come to an end in 2019.
The local market remains challenged by relatively a low inventory of homes for sale, while rising mortgage rates and new tax laws that places some limits on the mortgage interest deductions and property taxes are taking some of the luster off home ownership. Already, home sales have slowed.
In December, single-family home sales were down 4.1 percent compared with the same month in 2017 — the second straight month of declining year-over-yearsales, according to the Houston Realtors Association.
“When I talk to other Realtors, I think the second half of the year was really slow,” said real estate agent Shad Bogany. “Builders were telling us it was slow. Certain neighborhoods, we’re not getting any traffic at all, especially where you had resales and new homes in the same neighborhood.”
The major culprit appears to be mortgage rates. The average rate on a 30-year mortgage jumped to nearly 5 percent in 2018, from lows near 3 percent in recent years. While rates have again retreated, falling last week to 4.5 percent, experts said buyers took note of the trends.
Anticipating higher rates, they rushed to purchase homes early in the year, frontloading 2018 sales, said Patrick Jankowski, senior vice president of research for the Greater Houston Partnership.