Houston Housing Market - 2025 Forecast

With this being our last Market News Snapshot of 2024, it’s probably appropriate to take a look back at the general themes that characterized the housing market in 2024, and what themes / trends we’re looking out for or expecting in 2025.

For the past 3 years, we’ve been in a “real estate recession”. Not in the sense of plunging home values; to the contrary, home prices have continued to climb, a trend that is expected to continue in 2025.

When we say “real estate recession”, we’re referring to the dramatically low number of home sales nationwide. According to Housingwire, home sales have averaged about 5.15 million per year over the last 20 years. Year to date in 2024, we’re pace on pace for about 4 million home sales for the year.

(Additional context: During the years inflating the housing bubble, sales were as many as 7 million (2005). In the years after the bubble burst and as the market slowly recovered, there were around 4 million sales until 2013. During the pandemic, that rate exceeded 6 million

home sales in 2021.)

I think both buyers and sellers are feeling the headwinds of the market. Buyers are faced with higher interest rates and slim pickings due to low inventory. And for sellers, not everything is selling for a million dollars over asking with 1 day on market like they were during the pandemic.

The good news is that home sale transaction volume is projected to increase in 2025.

I can think of a few reasons attributing to this:

• Mortgage rates have moderated, and we’ve come down from the peak 8% range. For the last few months rates have been around the 6.5-7% range, and I think a lot of people are just getting used to the higher rates. Moreover, life changes force housing changes, and you can only hold off for so long. Your kids aren’t going to stop growing just because you don’t like where mortgage rates are at, and at some point you may have to just bite the bullet and make a move.
• With more homeowners jumping back into the market as buyers, more inventory will become available. And with more housing supply, transaction volume will go up.

There’s probably 100 more reasons contributing to more home sales next year, but these are the big points that immediately come to mind. They’re also probably the most relatable for the cohort that follows Chris and Cab, i.e. people in their late 20s through 40s.

For a more in depth look at what we expect 2025 to have in store, check out HousingWire’s complete 2025 Forecast. You can download a copy by clicking here.

If you’re thinking about buying or selling in the next 12-24 months, we’d love to help, and it’s never too early to formulate a plan. Let’s schedule a call.