Houston Home Sales Plummet

It finally happened: Houston home sales plummet, ending long winning streak

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Houston home sales fell more than 10 percent in November as the impact of falling oil prices and the softness in the local economy pinched the realty market.

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Houston home sales fell more than 10 percent in November as the impact of falling oil prices and the softness in the local economy pinched the realty market.

The Houston Association of Realtors reports 4,595 single-family homes were sold in November, down from 5,135 sales in November of last year.

The November dip follows a weak October, indicating that the trend for exceptionally strong sales may have come to an end after a three-year run. Last year, was the best year ever for home sales in Houston and this year was strong also — until now.

Historically, home sales taper off at the end of the year as consumers focus on holidays, families and travel. But this is different. This decline runs deeper.

“It is slower than the typical November and December,” says Amy Bernstein of Bernstein Realty. “There are some very concerned buyers out there.”

Decline in oil prices

The decline in oil prices – dropping to a seven-year low of less than $38 a barrel today from a high of $107 in June 2014 – have caused layoffs and economic slowdown in Houston, also known as the “Energy Capital of the World.”

Houston housing market, which had been one of the strongest in the nation, will be hurt by falling oil prices, says Lawrence Yun, chief economist for the National Association of Realtors.

“Houston is more exposed to oil prices than Dallas,” Yun says. “Houston is taking a hit.”

Houston home prices are getting softer, Bernstein says, which may offer some opportunities to buyers who had been outbid during Houston’s supercharged market in recent years.

The average price of a home sold in November was $262,064, down 3.5 percent from $271,487 a year earlier, HAR reports. It was the first decline in Houston prices since February 2012.

On the plus side

Even with the fourth quarter swoon, Houston real estate is not headed for an outright catastrophe. Year-to-date home sales are running less than 2 percent behind the sales pace of 2014, which was the best year ever.

Houston overall economy has lost its status as one of the top job creators in the nation. Houston will gain 22,000 new jobs in 2016, not as many as the 100,000 jobs in 2014, but still a gain, not a job loss, says Patrick Jankowski, regional economist for the Greater Houston Partnership. Job creation fuels real estate markets.

Plus, Houston will be adding population next year, Jankowski says, and that’s another plus for real estate.

Rising mortgage rates

Looking ahead, a question mark facing housing is specter of rising mortgage rates. Many economists believe the Federal Reserve will move next week to raise interest rates and more rate hikes could be coming in 2016. Exceptionally low rates have been fueling home sales for seven years.

Last week, the 30-year mortgage rate was 3.93 percent, only slightly higher than the 3.89 percent reported a year ago, according to Freddie Mac.

“No one is expecting rates to move substantially in the months ahead given global economic weakness,” says Jonathan Smoke, chief economist for Realtor.com. Smoke expects mortgage rates to remain relatively low for at least a year, perhaps a lot longer.

Rising mortgage rates will have to go higher than 5 percent to have a real impact on home sales and it will be first-time home buyers who will be ones who get hurt the most when they do rise, according to the new First American Financial’s national survey of title agents.

First-time home buyers accounted for only 32 percent of home sales in the past year, the lowest number since 1987, according to the National Association of Realtors. Tight credit and restrictive lending policies have made it harder for younger people and first-time buyers to get home loans, the National Realtors Association says.

Ironically, the initial uptick in mortgage rates may actually provide a boost for home sales. When the fence-sitters or would-be home buyers who have been shopping for a home for a while see that rates are going up, they could be prompted to move quickly to buy a home.

That could make Houston realty start off 2016 with a bit of a lift – or at least offset the pain inflicted by the dismal oil prices.

Ralph Bivins, editor of Realty News Report, is a past president of the National Association of Real Estate Editors.

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THE AMERICAN DREAM

How long it takes to save for a home down payment in Houston

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Houstonians don't have to save long to afford a down payment.

Saving for a down payment remains one of the biggest barriers to homeownership nationwide, but a new report from Realtor.com shows San Antonio area buyers face a far shorter wait than most Americans.

According to the real estate site’s 2025 analysis, the typical U.S. household needs seven years to save for a standard down payment, a notable improvement from the 12-year peak in 2022. Still, the timeline remains roughly double the pre-pandemic norm, reflecting higher home prices, larger down payments, and lower household savings rates.

Houston, however, stood out as one of the most accessible major metros in the nation. The Houston-Pasadena-The Woodlands metro boasted one of the shortest time sto save for a down payment among the nation’s 50 largest markets, with households needing just 3.5 years to reach a typical down payment, according to the study.

The report found that Houston’s median down payment from January through November was $14,927. A median household income of $83,452 was estimated to produce an annual savings of $4,228. Notably, San Antonio, the only other Texas city included in the report, had the shortest time to save for a down payment at just 1.3 years.

Nationally, the time needed to save has shortened as home price growth cooled and affordability modestly improved. Still, saving for a down payment takes significantly longer than it did before the pandemic.

“Higher home prices and intensified competition have pushed typical down payments higher, at the same time that inflation and rising household expenses have reduced savings rates,” said Danielle Hale, chief economist at Realtor.com, in a release. “Although conditions have improved since 2022, today’s timeline shows that saving for a home takes meaningfully longer than it did before the pandemic, especially in high-cost markets.”

Lower savings rates have played a key role. The U.S. personal savings rate has averaged 5.1 percent of income so far in 2025, down from the pre-pandemic norm of 6.5 percent, limiting how quickly households can build funds for upfront housing costs. Meanwhile, the typical down payment has more than doubled over the past six years — rising from about $13,900 in the third quarter of 2019 to $30,400 in the third quarter of 2025.

In high-cost coastal metros, the impact is far more severe. Saving for a down payment can take 20 to more than 35 years in California cities like San Francisco, San Jose, Los Angeles, and San Diego, effectively sidelining many first-time and moderate-income buyers.

“In high-cost markets, the typical down payment alone exceeds a full year of household income,” said Hannah Jones, Realtor.com senior economic research analyst. “That reality makes homeownership feel unattainable for many buyers, particularly younger households trying to enter the market for the first time.”

Despite those challenges, the report notes that roughly three-quarters of Americans still consider homeownership part of the American dream. Realtor.com says easing rents could help first-time buyers save more, while repeat buyers may use accumulated savings to reduce loan balances and manage higher monthly payments.

“Saving consistently, even in small amounts, is a meaningful first step toward homeownership,” Jones said. “In today’s market, building that financial cushion can make a real difference when buyers are ready to act.”

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