High prices and rising interest rates are leaving more homes for sale

HOUSTON - In the heat of summer, Houston's housing market is cooling down, a bit, as record high prices and rising interest rates have taken their toll. It reflects a national trend that sees a growing number of homes on the market and pickier buyers.

Charlie Mackey, from real estate broker Sundae, which specializes in buying 'as-is' properties, says while the market remains tilted toward sellers, it's becoming a little less so.

"We suffered from an inventory shortage for several years," Mackey says.

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In June, the Houston Association of Realtors reported a 27% increase in the number of homes for sale year-to-year, while the average price jumped 11% to more than $436,000, and the number of closings dropped almost 9%.

Nationally, a Realtor.com analysis finds listings up by a third, as homes are taking longer to sell. Experts say buyers are getting pickier, as their money doesn't go as far.

With 30-year interest rates at about 5.5%, purchasing power can be trimmed by tens of thousands of dollars. It's prompting some buyers to even back out.

"Whenever they're in escrow, maybe they see a rate hike; maybe they think home prices will go down," says Mackey, "They feel some sense of buyer's remorse because of the inventory and because of the mortgage rate volatility."

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Local realtors say home prices have softened some in recent months.

Nationally, though, more than half of existing home sales are going for above asking-price, while inventory remains below pre-pandemic levels. It indicates that home buyers are still willing to pay a premium, to move.