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When the real estate market does not have enough houses to meet six months of demand, it is considered a seller’s market. In Sugar Land and Missouri City, less than three months of inventory is considered a seller’s market. In April, less than one month of housing inventory was available in Fort Bend County. Seller’s market
MONTHS OF INVENTORY IN FORT BEND COUNTY
Mortgage Corp., commonly known as Freddie Mac. That is the highest level since 2008 in the midst of the Great Recession. Adam Perdue, a research economist from the Texas Real Estate Research Center, said the county’s low inven- tory goes hand in hand with rising home costs. In Fort Bend County, the average single-family housing price grew from $380,785 in April 2021 to $455,177 this April, according to the center’s data. “There’s just not many houses available anymore,” Perdue said. “Pricing increases are accelerating still. What that shows is that demand is still strong, while recent closings that are falling is because there are not as many houses left.” Yet experts said homebuyer demand remains strong, especially within certain neighborhoods of Fort Bend County, such as the Sienna master-planned community along with Glendale Lakes and Parks Edge, which are set to add over 7,000 new homes by 2031 to meet the demand. Rising rates The low inventory and the high demand mean not every potential homebuyer is able to purchase the rst home they place an o er for, and some have either been unable or unwilling to win a bidding war, experts said. Others have simply been priced out. “Buyer fatigue and also the inter- est rate are not helping homebuy- ers because the change of interest rate will change their monthly pay- ment,” said Serena Chu, a Realtor with Keller Williams who focuses on rental properties. “Buyers started to doubt and started to get worried and concerned, so some said, ‘You know
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4.2
3.9
4
3.3
3
Inventory in the U.S. MARKET STABILITY
Inventory in Sugar Land & Missouri City
STABLE MARKET
months 6+
months 3+
BUYER’S MARKET STABLE MARKET
2
0.9
0.9
months less than 6
months less than 3
SELLER’S MARKET
1
“There is a huge mismatch in supply versus demand. ... Even if you dumped twice the number of homes into the market today, that would still not meet the demand of buyers in the market.” KUNAL SETH, REALTOR, THE SETH BROTHERS TEAM
0 2018 APRIL
2019
2020 2021
2022
SOURCES: TEXAS REAL ESTATE RESEARCH CENTER, KUNAL SETH COMMUNITY IMPACT NEWSPAPER
what, I’m just going to rent, and I’ll wait out the market.’” This sentiment comes as the national 30-year xed-rate mort- gage hit 5.81% June 23, according to Freddie Mac. While low compared to historic rates like the 18% mort- gage rate the country faced during the 1981 recession, mortgage rates have gone up over three percentage points since January 2021, when the rate dropped to 2.65%. That means at a 5.81% 30-year xed mortgage rate and a home price of $455,177, a homeowner with a 20% downpayment would need to pay $2,139 per month on their mortgage, according to nancial technology company Smartasset.com’s mort- gage calculator. In January 2021, that same homeowner would have needed to pay $1,467 per month on their mortgage. Meanwhile, the demand for
single-family rentals across the Greater Houston area re ects that growing homebuying hesitation. A June 15 report from the Hous- ton Association of Realtors showed 3,406 renters leased out single-fam- ily homes in May—a nearly 25% increase compared to the prior year. A 2022 Consumer Sentiment and Home A ordability Survey from the HAR, released in May, revealed of 600 survey respondents across the Greater Houston area, the 79% who stopped searching for a home said they did so because they were priced out of the market, 62% because there was not enough inventory and 29% because of an increase in the mort- gage rate. This comes as the HAR reported the median monthly price for sin- gle-family rentals in the Houston area went up 8.1% year over year to $2,000 per month.
The average rents for one-bed- room apartments in Sugar Land reached $1,250 per month as of June 15, according to data from Zumper. com, a platform that tracks apart- ments available for rent. That is the highest rent rate across eight cities in the Houston area, above cities such as Houston and Pearland, which charged renters on average $1,200 per month. Higher rents are why 70% of rent- ers who responded to the HAR sur- vey said they are likely to purchase a home in the next two years. “If people think that it makes more sense to buy, those renters will advance as homeowners, and then the rental market will slow down a little bit,” Chu said. Market e ects To take advantage of lower mort- gage rates, homebuyers had been
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