The details
Wolf said existing home sales remain low—down year over year—despite an uptick in listings, including locally. Days on market rose to 44 in Houston, but Wolf said that doesn’t raise any alarm bells. Quick move-in homes have increased, averaging 3-3.2 per community, which is higher than the national average of 2.3.
In Houston, she said, most builders still describe demand as “slower than expected,” and Wolf said to anticipate seeing volatility in the mortgage market as investors navigate market data.
Wolf said that with national news like the ongoing trade war and immigration policy changes, the market can shift and make it unpredictable.
“To me, [immigration] is something that I want to flag as this could have an impact on our industry, not only in terms of the labor force, but also suspending here locally of different types of individuals,” Wolf said.
Diving in deeper
Zonda’s Market Ranking shows Houston and other Texas metros, including Austin and Dallas, as “average” performing.
“We’re in a market today that lacks any sense of urgency,” Wolf said.
Wolf said public builders like Lennar and D.R. Horton dominate Houston’s top-selling projects and are driving price adjustments.
“They will typically lead in pricing coming down,” Wolf said.
Wolf said incentives—including rate buydowns and closing cost coverage—are widespread and essential, but no longer create urgency. She said consumers are expecting more. Additionally, new home prices are down 5% from their peak, and Houston prices remain 40% higher than in 2019.
Wolf said strong fundamentals support long-term housing demand in Houston, including 2% annual population growth, high birth rates and diverse migration.
Looking ahead
Zonda revised its national single-family housing starts forecast from +2.5% to -5%. In Texas, 63% of surveyed builders expect starts to remain flat or decline.
“This is the year for margin compression,” Wolf said. “Builders are not being as aggressive on new spec starts ... especially if every home sale is coming with some kind of incentive or a price cut.”
Still, Wolf said Houston’s demographic trends—especially millennials entering family-start years—support long-term demand.
“There’s a lot of reasons that buying a new home should feel like a no-brainer,” Wolf said. “It’s incumbent on us ... to make sure they know that.”
