Houston Market Update - May 2025

For this month’s update, I’m tying together data and themes from a few charts, including:

• Mortgage Purchase Applications

• HAR’s Weekly Activity Snapshots

• New Listings

• Pending Listings

• Showings

• Closings

• Off-Market (Withdrawn) Listings

Let me show them to you, and then I’ll break down what I think they’re showing us:

Mortgage Purchase Applications

Mortgage Purchase Applications are a forward looking indicator of housing demand. This chart shows 16 consecutive weeks of year-over-year growth for mortgage applications. This would imply more buyers are jumping into the market (or at least thinking about buying).

Trends from HAR Weekly Snapshots

First thing I want to point out is that New Listings are up this year. In the chart above you can see we’ve had year-over-year increases in new listings each week.

This New Listing data seems consistent with the year-over-year increases in the national Mortgage Application Data I pointed out earlier. Since a lot of home sellers also have to buy a new home, it would make sense that these two charts would move in the same direction. If you’re a homeowner needing to move, you’re going to apply for a mortgage and list your current home for sale.  

Now let’s take a look at Houston’s Pending Listings, Showings, and Closings data.

In my view, when I look at the trend lines of these 3 categories, they look strikingly similar to 2024.

So there seems to be a contradiction. On one hand it looks like there are more people jumping into the market (because New Listings and Mortgage Applications are up). On the other hand, Pendings, Showings, and Closings look like last year’s. So what gives?

When I look at the Off-Market Listings (listings that were withdrawn from the market), I get a little bit of insight as to what’s going on.

Off-Market (Withdrawn) Listings - Last 4 Weeks

Withdrawn listings are way up compared to last year.

Also, Months Inventory is up to 4.9 months, up 3.6 months from a year earlier. (4-6 months inventory is considered a balanced market in Houston.)

In my view here’s what’s going on:

People have gotten used to elevated mortgage rates, so buyers are willing to jump in and explore the market. However, they’re being picky. When you combine elevated interest rates with elevated home prices, buyers are thinking a house needs to be worth it if they’re going to stretch their budget.

At the same time, a lot of sellers may have unrealistic expectations as to what they can sell their house for. In 2022 they saw their neighbor sell their house for a $100K gain, and they’re hoping to do the same thing, only to find out today’s market is not 2022. This might explain the Off-Market (Withdrawn) listing data.

Final Takeaways

🔹 If you're a buyer – You’ve got more options now than you did last year. Just don’t wait too long for the good ones. Anecdotally we’re still seeing multiple offer situations for the good listings.

🔹 If you're a seller – Competition is up and will continue to rise. Competitive pricing and exceptional presentation will help set you apart. 

🔹 If you’re waiting on rates to drop - It’s impossible to time time the market, especially with the volatility we’ve been seeing in the economy. We honestly feel it’s better to get in the game early, patiently stay in the game, and be decisive when the right opportunity comes along. 

Of course, everyone’s situation is different. If you’re looking to build a real estate game plan around today’s trends, reach out. We’re here to help.