Trying to time your next move in Houston? You’re not alone. The market has shifted toward balance, and a few key signals can help you decide whether to buy, sell, or hold. In this guide, you’ll learn the Houston metrics that matter, what they mean in plain English, and how to use them to your advantage. Let’s dive in.
Quick Houston snapshot
Houston’s single-family market is cooler than the frenzy of recent years yet still active. According to the Houston Association of REALTORS, the September 2025 median price was about $327,000 (down 2.1% year over year), the average price was roughly $421,655, and months of inventory stood near 5.2 months with days on market in the mid‑50s. That reads as a more balanced environment for many neighborhoods and price points. HAR’s latest update is the most reliable local source for these figures.
Mortgage rates have eased. The average 30‑year fixed rate moved into the mid‑6% range in mid‑October 2025, with Freddie Mac reporting about 6.27% on October 16. Lower rates have helped lift pending sales in recent months. See the weekly rate trend.
Why inventory matters now
Months of inventory measures balance between supply and demand. Around 5 to 6 months is commonly called balanced. Less than 3 months often favors sellers; more than 6 months tends to favor buyers.
What 5.2 months means
With roughly 5.2 months of supply, Houston is closer to neutral conditions. You can expect more negotiating room for buyers in many segments and the need for smart pricing and presentation for sellers. HAR’s market summary confirms inventory has climbed from earlier lows.
What to watch next
- A sharp jump in active listings without a matching rise in pendings can pressure prices.
- If months of supply climbs above 6, pricing power tilts toward buyers. If it dips toward 3, competition heats up.
- Track pending contracts, since they lead closed sales by several weeks. HAR updates highlight these shifts.
Mortgage rates and your payment
Rates drive affordability. Even a half‑point move can change your monthly payment and price range. As rates eased into the mid‑6% range in October 2025, more buyers re‑entered the market and pendings improved. Freddie Mac’s weekly survey is a helpful benchmark.
If you’re buying, stay preapproved, watch rates weekly, and be ready to lock when a favorable quote appears. If you’re selling, expect more showing activity when rates dip and prepare to act quickly on strong offers.
Local costs: insurance, floods, and taxes
Houston’s true cost of homeownership includes more than principal and interest. Insurance and local taxes play a big role.
Flood insurance and NFIP
Some homes require flood insurance for mortgage approval. In October 2025, the National Flood Insurance Program’s authorization faced a potential lapse, which can delay new policies and closings in flood zones. Stay ahead by discussing private flood options and timelines with your lender and insurer. Learn more about the risk of NFIP disruptions from the Associated Press and local reporting on NFIP timing issues.
Windstorm exposure
Coastal and near‑coastal properties may be affected by windstorm insurance pressures. The Texas Windstorm Insurance Association has signaled continued attention to rates and adequacy. Keep an eye on updates noted by the Houston Chronicle.
Property taxes and levies
School district and local tax changes can shift monthly carrying costs. In 2025, HISD actions tied to disaster recovery drew attention to how rates and valuations can affect tax bills. See coverage from the Houston Chronicle and plan for potential changes in your budget.
Houston demand drivers to know
- Jobs and population: Greater Houston continues to add residents and has seen steady employment with some moderation in 2025. Population growth supports housing demand. See Axios on population gains and the BLS metro releases.
- New construction: Texas metros remain leaders in single‑family permits, and apartment deliveries moderated in 2025. A faster permit pipeline can add supply over time. Track the region’s permit trend via FRED.
- Investors and built‑to‑rent: Houston is a leading market for built‑to‑rent communities, which adds rental options and influences entry‑level for‑sale supply. See Axios coverage.
The six signals to track
Use these leading and coincident indicators to time your offer or listing:
- Months of inventory
- Under 3 months signals strong seller conditions. Around 4 to 6 months signals balance. HAR’s current read sits near 5.2.
- Active and new listings
- A big month‑over‑month jump, without matching pendings, can force price cuts in specific tiers.
- Pending sales
- Rising pendings are an early sign of demand returning. Track the trend in local MLS summaries and HAR updates.
- Days on market and sale‑to‑list
- Longer DOM and lower sale‑to‑list ratios indicate buyer leverage. Faster DOM points to tightening competition.
- Mortgage rate trajectory
- A move of 0.5 to 1.0 percentage point can materially shift affordability. Watch Freddie Mac’s weekly read.
- Insurance and NFIP status
- NFIP lapses can delay closings in flood zones. Monitor reauthorization news from the AP and talk to your insurer early.
Buyer action steps
- Get fully underwritten preapproval and watch rates weekly.
- Ask your agent for a neighborhood‑level read on months of supply, DOM, and pending trends.
- Request insurance quotes early, especially for flood and wind coverage.
- Compare new‑home communities and builder incentives with resale options. Check permit trends on FRED.
Seller action steps
- Price to the market. In a balanced environment, realistic pricing drives showings and faster DOM.
- Elevate presentation. Complete key repairs and stage to stand out as inventory rises.
- Offer flexibility. Consider closing date flexibility or targeted credits if activity slows.
- Monitor nearby new‑build competition and adjust your strategy if builder incentives surge.
Houston’s market is giving both buyers and sellers a fair shot. If you want neighborhood‑specific numbers and a tailored plan for your timeline, reach out to Prestige Realty Group for a data‑driven, high‑touch strategy.
FAQs
Is Houston a buyer’s or seller’s market in late 2025?
- Houston is closer to balanced, with roughly 5.2 months of inventory, slower sales pace, and mid‑50s days on market, though hot micro‑markets may still favor sellers, per HAR’s update.
How are mortgage rates affecting my buying power?
- With average 30‑year rates near 6.27% in mid‑October, affordability improved versus earlier 2025 peaks and pending sales picked up, according to Freddie Mac reporting.
Can flood insurance or NFIP delays affect my closing?
- Yes, if a home requires flood insurance for financing, an NFIP lapse or delay can stall closings; consider private options and plan timelines, as covered by the AP and Houston Chronicle.
Which price ranges are most competitive right now?
- Midrange single‑family homes around $250,000 to $500,000 remain the most active segments, while luxury saw pockets of strength that lifted averages, per HAR’s market view.
What should sellers do if nearby listings are climbing?
- Focus on competitive pricing, standout preparation, and smart incentives if days on market lengthen; homes priced to current conditions sell faster, per HAR guidance.
