America's Hottest Market

Houston's real estate market is unstoppable: Higher rates don't come close to slowing home buying frenzy

Houston home sales showed no signs of a slowdown as August sales were up over 16 percent over the same month last year. The 7,504 single-family homes sold last month was the fourth month in a row sales have topped 7,000 — a pace not seen since 2007, according to the Houston Association of Realtors.

“This has definitely been a summer sales season unlike any we have seen before,” says HAR Chairman Danny Frank with Prudential Anderson Properties. “It’s difficult to say exactly when Houston’s boiling real estate market will begin to cool down.”

"Nobody is complaining about the rates. People are happy to get their deals done."

The inventory of homes for sale has tightened to a 3.3-month supply, down from a 3.4-month supply in July. A year ago, the inventory stood at 4.9 months.

The tight supply of homes for sale pushes prices higher and puts pressure on buyers who may be having a hard time finding a home in their price range and preferred part of town.

Mortgage interest rates have risen significantly since spring. In late May, the average mortgage interest rate was about 3.5 percent, but that has jumped to 4.5 percent today, according to the Freddie Mac survey of 30-year mortgage rates.

Houston Realtor Shad Bogany, chairman of the Texas Association of Realtors, says the higher mortgage rates have not dampened the hot market.

“No, not at all, really. Nobody is complaining about the rates. People are happy to get their deals done,” Bogany says.

The main challenges to the market are appraisals and mortgage availability, says Bogany. Mortgage lenders continue to have overly restrictive requirements on buyers who are trying to get approved for a mortgage, he says. And appraisers often fail to adjust to the current market with rapidly rising home values, says Bogany, who hosts a real estate call-in radio program on KWWJ 1360 AM.

Home prices have been rising sharply. The single-family median price in Houston rose 13 percent in August to $186,200, up from August of 2012, when the median was $165,000, the Realtors association reports. It was the highest median home price ever for an August in Houston.

The high-end of the local housing market registered remarkable gains. For homes priced at $500,000 and up, sales were up 51 percent in August, compared to August of last year.

The rental market was also strong. The August average rental rate was $1,748 in for a single-family home in Houston, a record high for an August.

Houston’s real estate market is one of the strongest in the nation. Major expansion in the energy industry is helping the city’s economy generate some 100,000 new jobs over the last year. That expansion, with the large number of energy company employees being transferred to Houston, has injected a lot of momentum into the housing market.

Home sales traditionally taper off as the holiday season approaches, so milder sales activity is expected this fall.

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The Boom Continues

Booming Houston-area ZIP among 5 fastest-growing new neighborhoods in U.S.

City of Fulshear/Facebook

Fulshear's 77441 ZIP code was the fourth-fastest growing U.S. neighborhood from 2014-2023.

As Texas' ever-growing population generates more demand among regional housing markets, one Houston-area ZIP code has seen more growth than nearly all other ZIPs in the state — and in the country.

Fulshear's 77441 ZIP code ranks No. 4 in RentCafe's new study that analyzed the 50 fastest-growing "new neighborhoods" in America "that barely existed a decade ago." Two more more Houston-area ZIPs in Katy and Richmond also made the cut.

The study reviewed housing inventory and population growth across 32,000 U.S. ZIP codes and narrowed down the search to the top 50 locales that experienced a 51 percent minimum surge in new housing units from 2014-2023.

Overall, Texas dominated the list with 17 of the nation's 50 booming new neighborhoods.

RentCafe determined the 77441 ZIP code in Fulshear saw a 391 percent surge in housing inventory in the last decade to keep up with the area's 482.7 percent population growth over the same period.

In 2014, there were just 5,647 residents living within the bounds of 77441, which stretches across both halves of FM 1093 as far west as Sidmonton and as far east as FM 1463 Rd. During that same year, there were only 2,163 housing units in the area, which has since spiked to 10,615 units as of 2023. The ZIP code now boasts a population of more than 32,900 residents, the study found.

"Fulshear is a good example of exurban spillover as it’s located within proximity of Houston’s major employment centers, like the Energy Corridor and Texas Medical Center," the report said. "In fact, Fulshear is about 30 miles from downtown Houston, which makes it a great living option for commuters."

Fast-growing ZIPs in Houston
77493 in Katy and 77407 in Richmond respectfully ranked as the 25th and 45th fastest-growing ZIPs in the U.S. over the last decade.

The report's findings revealed Katy has more than doubled its housing inventory to 20,552 units, up from about 8,200 units in 2014. The area's population has also more than doubled, from 24,577 to 62,264 residents as of 2023.

Richmond's population has surged 123 percent over the last decade, from 11,350 to 25,284 residents, and housing inventory soared 132.4 percent to keep pace with the growth. A recent boom in apartment construction is a major factor that contributed to the suburb's expansion, the report said.

The top 10 "newest" neighborhoods in the U.S., says RentCafe, are:

No. 1 – Chino, California (91708)
No. 2 – Timnath, Colorado (80547)
No. 3 – Colorado Springs (80927)
No. 4 – Fulshear, Texas (77441)
No. 5 – Ponte Vedra, Florida (32081)
No. 6 – Jersey City, New Jersey (07311)
No. 7 – Fort Worth (76177)
No. 8 – Colorado Springs (80924)
No. 9 – Prosper, Texas (75078)
No. 10 – Melissa, Texas (75454)

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