Houston Real Estate Market Report: Fall 2024

The September rate cut happened. On September 18th the Federal Reserve cut its benchmark rate by 50 basis points to a target range of 4.75–5.00%, the first cut since March 2020. The mortgage market had partially priced this in: Freddie Mac’s Primary Mortgage Market Survey (PMMS) for the week of September 19th showed 30-year rates at 6.09%, the lowest since February 2023. My summer prediction of a “visible surge in buyer activity in October and November” was correct in direction if not in magnitude. Showing activity in October was up noticeably from September. Offers per listing increased. The conversation with buyers changed in character — less “should I wait?” and more “what should I be offering?”

What I did not predict: rates moved back up after the cut. Freddie Mac’s PMMS went from 6.09% in late September to 6.32% by October 10th and 6.79% by November 7th — the week the Fed cut again, by 25 basis points. The bond market is reassessing the pace of future cuts based on an economy that is performing better than a rate-cut environment typically requires. The 10-Year Treasury yield has risen since the September cut, not fallen, reflecting the market’s view that the Fed’s path is slower and shallower than September futures implied. This is a pattern worth internalizing: rate cuts from the Fed do not automatically produce lower mortgage rates if the bond market is simultaneously revising its economic outlook upward.

Houston Association of Realtors (HAR) Fall Data

HAR’s October report shows closed sales up 9% year over year — the strongest annual comparison since 2022. Median home price holds at approximately $335,000. Days on market has tightened to 39 days. Active listings, which peaked near 35,000 in July and August, have declined to approximately 30,000 as fall seasonal patterns reduce new listing volume. The improving volume metrics and tightening days on market confirm the recovery narrative. This is the best fall data HAR has produced since before the rate shock cycle began.

Federal Housing Finance Agency (FHFA) announced the 2025 conforming loan limit increase to $806,500, which opens conventional financing to a higher tier of Houston buyers. For buyers in the $700,000–$800,000 range who were previously looking at jumbo pricing, this is a meaningful change that takes effect January 1st. If you are buying in that price range, it may be worth discussing with your lender whether waiting until January to benefit from conforming pricing makes sense for your situation.

Corridor Notes: Fall Activity

The first-time buyer reappeared in the northwest corridor in October in a way that has not been visible since 2022. The 50-basis-point cut brought affordability back to a level that entry-level buyers in Cypress and the outer Bridgeland adjacencies could reach with conventional financing. This cohort’s return adds volume to a segment that has been quiet for two years and bodes well for the absorption of entry-level inventory through 2025.

Luxury above $800,000 in the inner loop had a strong fall. West University and River Oaks are seeing offer activity that reflects a buyer who has equity, is rate-insensitive, and has been waiting for a psychological signal that the cycle has turned. The September cut was that signal for some buyers regardless of what happened to rates afterward.

Outlook for Winter 2024–2025

The setup for 2025 is the best I have observed since I started writing these reports. Rates are in the mid-to-upper 6s. The Fed has cut twice and is expected to cut further, though more slowly than the market hoped. Houston’s employment base is stable. Pent-up demand that accumulated through 2022–2024 is releasing at an accelerating pace. My prediction for winter: slower seasonal activity as expected, but the floor in buyer demand is higher than any recent winter, and the spring 2025 setup looks like the most promising since the rate shock began. The risk is a re-acceleration of inflation that causes the Fed to pause cuts, which could stabilize rates in the upper 6s rather than allowing further improvement. Watch the December and January Consumer Price Index (CPI) prints.