Recent housing market forecasts for the Houston, Texas area predict that home prices will continue rising in 2019 as they did in 2018, but possibly at a slower pace.
Given the current supply-and-demand situation in the Houston real estate market, it would not be surprising to see the median home value rise between 4% and 6% between now and January 2020.
Houston Housing Market Forecast for 2019
Home prices in Houston rose by around 7% over the past year, according to data compiled by Zillow. Looking forward, their research team predicts that house values will continue rising through 2019 and into 2020 — but at a slower pace than the past year.
In January 2019 the group wrote:
“Houston home values have gone up 7.0% over the past year and Zillow predicts they will rise 4.4% within the next year.”
Other housing market forecasts for Houston, Texas have made similar predictions.
This mirrors the overall trends and projections for the nation as a whole. In many cities across the country, economists and analysts expect home prices to continue climbing through 2019 and into 2020. But the year-over-year gains will likely be smaller than those we’ve seen over the past couple of years.
Average Home Price Rises Above $300,000
According to a January 2019 report from the Houston Association of REALTORS® (HAR), the average home price in Houston rose to $306,314 in December 2018. That was an increase of 4.7% from a year earlier.
The median price for a single-family home rose 3.4% to land at $240,000 in December. That was the highest median price ever for a December, according to HAR. (The median is the midpoint, which means half of all homes sold for more than $240,000, while the other half sold for less than that amount.)
Housing Inventory Still Limited in Most Areas
Real estate market predictions for Houston, Texas suggest that home prices will likely continue to rise during 2019. Supply is a big part of this outlook. In short, the Houston housing scene is still experiencing a shortage of inventory relative to the demand from buyers in the market.
At the end of 2018, there was roughly a 3.6-month supply of homes for sale in Houston. Many economists say that a “balanced” real estate market has a 5- to 6-month supply of homes for sale at a given time. So Houston is still a bit tight, at least when it comes to inventory.
But it’s not as tight as the other major metro areas in Texas. At the start of 2019, Austin, Dallas and San Antonio all had less housing market supply than Houston did during that same period.
What all of these Texas housing markets have in common is that demand for homes currently exceeds the available supply — and that is putting upward pressure on prices.
Strong Job Market Helping Buyers
Local economies and housing markets go hand in hand. When employment levels rise, we tend to see an uptick in home purchases. After all, buyers need steady income to make a purchase in the first place.
And there’s good news on this front as well.
The unemployment rate for the Houston-Sugar Land-Baytown metro area was down to 3.8% at the end of 2018. That’s a big improvement, especially when you consider that it rose to 8.7% in 2010 following the Great Recession.
In addition to luring new residents into the area, a strong job market gives buyers the confidence and financial means to make a home purchase. This is partly why the city is getting mostly positive real estate market forecasts and predictions for 2019.
Houston’s population has risen gradually over the past decade, and is now up to around 2.3 million. That’s within the city itself. The broader metro area now has a population north of 6 million. Population growth increases the demand for housing on both the rental and purchase side.
Is Now a Good Time to Buy in Houston?
With forecasts suggesting the Houston real estate market will continue to climb, 2019 could be a good time to buy a home in the area.
In fact, a sense of urgency might be warranted here. If house value do continue rising, those who put off their purchases until later this year could end up paying more. Especially if mortgage rates climb.
Here are some other reasons why 2019 could be a good year to buy a home in Houston, Texas:
- Low mortgage rates: As of late January 2019, the average rate for a 30-year mortgage rate was down to 4.45%. That was its lowest level since April of 2018. Home buyers in Houston can still take advantage of these low rates — at least for a while. They’re expected to rise gradually later in 2019.
- An appreciating asset: With home prices in the Houston area expected to continue climbing, buyers could put themselves on the road to equity. Granted, no one can predict future economic conditions with complete accuracy. But the general consensus among forecasters is that the Houston housing market will see rising home values for the foreseeable future.
- Jobs: We talked above the drop in unemployment across the Houston metro area. This puts local home buyers in a better position to make a purchase (and keep up with their mortgage payments).
Overall 2019 could be a good year to buy a home in Houston, Texas. Of course, there are many other factors a person should consider before making such a large investment. But from a market perspective, conditions appear to be favorable for home buyers in the area.
Disclaimer: This article includes forecasts and projections for the Houston real estate market through 2019 and into 2020. Such predictions were provided by third parties outside of our company and are the equivalent of an educated guess.