Houston Real Estate Market Report: Summer 2024

The story of this summer has two chapters. Through July, the Houston market continued the cautious-but-active pattern of spring: rates hovering near 7%, buyer activity solid but not frenzied, inventory slowly building in outer suburbs while established corridors stayed tight. Then in early August, the macro picture shifted sharply: a weaker-than-expected July employment report, combined with the Bank of Japan unexpectedly raising rates, sent global markets into a brief but significant volatility episode. The 10-Year Treasury yield dropped, mortgage rates followed, and Freddie Mac’s Primary Mortgage Market Survey (PMMS) for the week of August 8th came in at 6.47% — the lowest reading since May 2023. The Fed’s July 31st meeting had already signaled that a September rate cut was on the table; the August data made it a near-certainty in futures pricing.

The Consumer Price Index (CPI) trajectory is the most encouraging development of this cycle. June came in at 3.0% year over year, July at 2.9%. We are approaching the Fed’s 2% target from above at a rate that makes September cuts defensible. Whether the cuts that come are 25 or 50 basis points — and the answer to that depends heavily on the August and September employment reports — will determine how much the market responds. My read from the CME Group FedWatch Tool tool is that futures are pricing in 50 basis points for September and a total of 100 basis points by year-end. That is aggressive relative to what the Fed has signaled.

Houston Association of Realtors (HAR) Data: Summer in Context

HAR’s July report shows Houston’s median home price at approximately $335,000, up slightly from spring and up 2% year over year. Active listings have climbed to roughly 35,000 in the metro — the highest since 2019 — as sellers who were locked in have started coming to market. Months of supply is approaching 3.8. This is the most balanced supply picture the Houston market has had in several years. Days on market is running about 46 days on average. These are not distressed conditions but they are genuinely buyer-friendly compared to the 2021–2022 environment.

Northwest Corridor Mid-Summer

The Bridgeland and Marvida markets are running at a pace that I would describe as healthy absorption. New construction deliveries in later phases are priced above where early-phase resale sits, which is producing a two-tier market that actually benefits well-maintained resale sellers. The community amenity maturity in both developments is increasingly being used as a selling point by buyers’ agents who know the area. The trail networks, the Town Center retail, the community events infrastructure — these are real things that show up in buyer conversations as reasons to choose Bridgeland over comparable square footage in less-developed suburban areas.

Outlook for Fall 2024

I think fall 2024 is going to be the most active fall since 2021, and I am more confident in that prediction than I have been in any outlook I have written in this report series. The rate trajectory is constructively negative (falling). The inflation trajectory is constructively negative (also falling). The Houston employment picture is stable. And the pent-up buyer demand from the last two years of rate shock is real and measurable. If the September Fed meeting delivers a 25–50bp cut and rates drop to 6.0–6.25%, I expect a visible surge in buyer activity in October and November. Sellers who are still holding at current prices will find the fall more receptive than any season since early 2022. The risk to this prediction: if the labor market weakens materially before September, the Fed’s cut calculus changes and the rate relief that is driving this expectation does not materialize on schedule.