Is Houston’s Housing Market Finally Favoring Buyers? Here’s What February 2025 Data Reveals

The Houston housing market has been on a rollercoaster over the past few years—rising mortgage rates, inventory fluctuations, and shifting buyer sentiment have made it a challenging environment for both buyers and sellers. But as we move deeper into 2025, the latest data from February suggests a turning point—one that may finally work in favor of buyers.

With home prices declining for the first time in over a year, mortgage rates improving, and inventory levels expanding, buyers now have more leverage than they’ve had in a long time. But what does this shift mean for sellers, and how should investors navigate these changes? Let’s break it all down.

February 2025 Houston Housing Market Overview

According to the Houston Association of Realtors (HAR), the city’s housing market experienced its first price decline since November 2023.

Median home price: $325,000 (-1.2% year-over-year)
Average home price: $407,538 (+2.3% year-over-year)
Single-family home sales: 6,050 homes sold (-3.0% year-over-year)
Inventory levels: 31,112 active listings (highest since 2011)⏳
Days on market: 59 days (up from 58 days last year)

What does this tell us? The Houston real estate market is balancing out. The days of extreme seller dominance may be coming to an end, and buyers are finally seeing more options and negotiating power.

Why Did Home Prices Decline in February?

For the past few years, Houston’s home prices have remained on an upward trajectory. However, February’s 1.2% dip in median price suggests a cooling market. Here’s why:

More Homes Are Available: Inventory is at its highest level in over a decade, meaning buyers have more choices and less pressure to compete for homes.
Higher Mortgage Rates: Although rates have improved slightly, they’re still high enough to slow demand. The average 30-year mortgage rate sits at 6.7%, down from late 2024 but still significantly higher than pre-pandemic lows.
Economic Uncertainty: Discussions of potential tariffs, recession risks, and government layoffs have made some buyers hesitant, slowing overall market activity.

Mortgage Rates Are Easing – Will Buyers Return?

One of the biggest factors influencing Houston’s housing market is mortgage rates. The good news? Rates are trending downward.

Current 30-year fixed-rate mortgage: 6.7%
Mortgage applications: Up 31% compared to last year

As interest rates continue to decrease, more buyers are expected to re-enter the market. And with inflation cooling, the Federal Reserve could cut rates as early as June, making homeownership even more affordable in the coming months.

Inventory Expansion: A Game-Changer for Buyers

One of the biggest shifts in Houston’s housing market is the increase in inventory.

Total active listings: 49,442 homes for sale (highest since 2011)
Months of inventory: 4.4 months (up from 3.3 months last year)

In simple terms, this means there are more homes available, giving buyers more negotiating power. For the past two years, limited inventory made home shopping extremely competitive. Now, with a growing supply, buyers have more time to shop, compare, and negotiate.

What does this mean for sellers?

Homes that aren’t priced correctly could sit on the market longer.
Pricing aggressively is now more important than ever.
Buyers are gaining the upper hand in negotiations.

What’s Selling – and What’s Not?

Houston’s market is not slowing down evenly—certain price points are still seeing strong demand.

Price Ranges with Strong Sales

$150,000 – $249,999: +2.0% increase in sales

$1M+ luxury homes: +1.9% increase in transactions

Price Ranges Seeing Declines

$250,000 – $499,999: -1.6% decline

$500,000 – $999,999: -8.1% decline

Why the shift? Buyers are focusing on affordability, and luxury home purchases are less impacted by mortgage rates. This makes entry-level housing and high-end properties the most competitive price points right now.

What Should You Do Next? Buyer & Seller Strategies

If You’re a Buyer

Take advantage of lower home prices – this could be your chance to buy at a discount before rates drop and demand rises again.
Get pre-approved – mortgage applications are up, so competition could increase soon.
Look at all your options – with more inventory available, you can be picky and negotiate better deals.

If You’re a Seller

Price your home correctly – buyers are watching affordability closely, so overpricing could cause your home to sit.
Be open to negotiations – with more listings on the market, buyers have choices, and you may need to offer concessions.
Make your home stand out – well-maintained homes with updated features are still selling fast.

A Unique Opportunity in Houston’s Market

Houston’s February 2025 real estate data shows a clear market shift toward a more balanced or even buyer-friendly environment. If you’re considering buying, this could be a great time to act before competition picks up in spring.

For sellers, strategic pricing and presentation will be key to getting top dollar in this changing market.

Want to know how these trends impact your specific situation? Let’s chat! Whether you’re buying, selling, or investing, I can provide personalized insights to help you navigate Houston’s shifting real estate landscape.