Houston housing market forecasts issued during 2017 suggest that the Texas city could have another year of steady, solid price gains in 2018.
Sales activity is strong due to moderate pricing and strong demand, and home prices are expected to continue rising through 2018. Those are the latest predictions and forecasts for the Houston, Texas real estate market, extending through the summer of 2018.
Houston Real Estate Market Forecast Through Summer 2018
In August 2017, the real estate information service Zillow reported that the median home price in the Houston metro area was $178,400. That was an increase of nearly 4% from the previous year. (Within the city itself, the median climbed above $200,000, as of July 2017.)
Looking forward, the company’s economists expect the median home value for the Houston area to rise by around 4.1% over the next 12 months. This housing market forecast was issued in August 2017 and extends into the summer of 2018.
In other words, they expect the next 12 months to be very similar to the last — at least in terms of home-price appreciation.
As always, supply and demand factor heavily in these housing market forecasts for Houston. So let’s talk about the supply situation.
In July 2017, the city had approximately a three-month supply of homes for sale. According to real estate experts, a “balanced” housing market has around six months of supply (give or take). So it seems that the Houston real estate market still favors sellers over buyers, due to limited inventory and sustained demand.
Clearly, this is having an impact on home prices. Whenever there is a supply-and-demand imbalance like this, we generally see house values rise. That’s what is happening in the Houston real estate market, as of the summer 2017. And housing analysts expect to see continued upward movement over the coming months, and well into 2018.
Housing Affordability Relatively High
According to the National Association of Realtors’ housing affordability index, affordability in the Houston area is still relatively high. An index rating of 100 means that a household earning a median income could afford the mortgage payments on a median-priced home. When last measured, Houston was around 180 on this particular index.
(When the affordability index rises above 100, it means that the average household earns more than enough to afford mortgage payments on a median-priced home.)
So while home prices in the area have risen, and continue to rise, the Houston real estate market remains relatively affordable for the “average” resident.
Sales activity is strong as well. In July of 2017, the Houston Association of Realtors (HAR) reported that home sales had risen yet again, for the 10th month in a row. They cited “moderate pricing and growing inventory “as driving factors in the local market.
The bottom line: current trends within the Houston real estate market, as well as forecasts for 2018, suggest that home prices will likely continue rising for the foreseeable future. All of the market fundamentals needed for continued appreciation seem to be in place, including strong demand from home buyers and relative affordability.
Our Advice to Buyers in the Area
The Houston housing market is not as “fast and furious” as some cities in the U.S. (we’re looking at you, Seattle). But it’s still an active real estate market with strong demand from buyers.
When you combine that with the somewhat limited housing inventory in the Houston area, you have a real estate market that tends to favor sellers over buyers. So buyers need to bring their ‘A’ game when entering the housing market.
Research and planning are the keys to success. Specifically, you’ll want to review recent sales activity in the area where you plan to purchase. This information is widely available online. You can use websites like Realtor.com and Zillow to review sales prices in your target areas. This will give you a better sense of what you can get for the money, so you can enter the real estate market with realistic expectations.
For those buyers who need to use a mortgage loan to purchase a home, we encourage you to get pre-approved for a mortgage loan before entering the market. It’s always a good idea to have your financing lined up before house hunting. But it’s even more important in an active real estate market with many competing homebuyers.
Buying a Home in Houston Now Versus Later
Recent real estate forecasts suggest another strong year for the Houston housing market. Additional home-price gains are expected, and the Mortgage Bankers Association expects mortgage rates to creep upward as well.
If these predictions proved to be accurate, it means that Houston home buyers who postpone their purchases until later in 2018 could encounter higher housing costs. So a strong case could be made for buying a home sooner rather than later.
Granted, only you can decide when it’s the right time to move forward. But with housing costs on the rise, a sense of urgency might be warranted.
Disclaimer: This article includes various trends and forecasts for the Houston, Texas real estate market into 2018. This information has been curated from third-party sources not associated with our company. We have compiled it here as an educational service to our readers. As a general rule, MetroDepth makes no claims or assertions about future housing and economic conditions.