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HOUSTON - (May 7, 2025) - The Houston housing market in April 2025 continues to reflect the broader economic climate—rising mortgage rates, climbing rental prices, and cooling sales across both single-family and multifamily sectors. This update gives a detailed look into how the Houston real estate market is shifting, offering vital insights for anyone buying, selling, or renting in the Greater Houston area.
While single-family home sales have slowed and condo inventory has increased, Houston rental rates are reaching new highs, and mortgage interest rates remain a major factor in buyer affordability. Whether you're looking to buy a home, sell your condo, or make a move from renting to owning, this month’s data and expert insight can help guide your next decision.
For first-time homebuyers, be sure to explore mortgage tips and hidden home-buying costs. Sellers can learn how to stay competitive in a shifting market with this seller's guide.
Let's dive into the data and what it means for your next move in Houston real estate.
Want a quick breakdown of this update? 🎥 Check out my latest YouTube Short for highlights, insights, and a closer look.
SINGLE-FAMILY HOMES UPDATE
The single-family sector in Houston continues to feel the effects of higher mortgage rates and economic uncertainty. April saw a 6% year-over-year decline in the number of homes sold, suggesting buyer hesitancy despite an increasing number of listings. The total dollar volume dropped slightly as well, down 5% compared to the previous year.
While the median sale price dipped slightly to $345,000, the average price remained virtually unchanged at $447,311. This indicates a market in transition—price reductions are occurring primarily in the more affordable segments, while demand for higher-end homes remains somewhat stable.
One of the most significant shifts is in the months of inventory, which jumped 45% year-over-year to 4.8 months. This moves Houston closer to a balanced market, where neither buyers nor sellers have a distinct advantage. Homes are also taking longer to sell, with the average days on market rising from 45 to 49 days.
This cooling doesn’t necessarily spell trouble—it could signal a return to more normal conditions after the hyper-competitive years of 2020–2022. For sellers, realistic pricing and proper staging are more important than ever. For buyers, rising inventory means more options and negotiating power. Be sure to check out these tips to sell your home fast in a buyer’s market if you're planning to list your property soon.
Single-Family Sales by Price Segment
Breaking down the numbers further reveals deeper trends in buyer behavior. Sales of luxury homes ($1M+) only dropped by 2%, showing that high-net-worth individuals are still willing to transact even in a rising-rate environment. The $500K–$999K category, however, dropped 8%, likely impacted by rate sensitivity and affordability constraints for move-up buyers.
The most significant shift occurred in the mid-range market—homes priced between $250K and $499K—which saw a 7% decline in transactions. This segment has historically been the bread-and-butter of Houston’s home sales, so any contraction here points to growing affordability concerns. Inventory may be up, but buyers at this level are either being priced out by mortgage costs or adopting a wait-and-see approach.
Interestingly, the $150K–$249K segment remained flat, showing resilience in the entry-level market. These homes continue to draw strong interest from first-time buyers and investors alike. The sub-$149K market, however, saw a 12% decline—possibly due to limited inventory, aging housing stock, or increased investor competition.
If you're house-hunting within any of these price bands, this guide to hidden home-buying fees is a must-read to help you budget wisely.
TOWNHOUSE / CONDOMINIUM UPDATE
The townhouse and condo market in Houston took a bigger hit than single-family homes in April 2025. Sales volume dropped 22% year-over-year, while the total dollar volume contracted by 27%. Prices also declined, with both median and average sales prices down 4% and 6% respectively.
This segment is highly sensitive to mortgage rate changes, and the numbers reflect that. First-time buyers who might have once viewed condos as an affordable entry point are facing the double whammy of rising monthly costs and limited lending options. As a result, many are opting to continue renting or wait until conditions improve.
With 7.5 months of inventory on the market, this is officially a buyer’s market in the condo space. Units are also sitting longer, with average days on market increasing from 42 to 53. This means buyers can take their time, negotiate more aggressively, and look for deals.
For sellers, that also means preparing for a more competitive landscape. If you're planning to list your condo, this blog outlines how to make your property stand out.
From a strategic standpoint, investors may find opportunities here as prices cool and rental demand rises. The key will be identifying well-located units with strong rental potential.
MORTGAGE INTEREST RATES TREND
Mortgage rates were on a roller coaster over the past year. After peaking at 6.85% in April 2024, they fell steadily through October, bottoming out at 6.48%. Many buyers rushed to take advantage of lower rates during the late summer and fall months.
However, by January 2025, rates began climbing again. April 2025 ended at 6.76%, just slightly below the previous year's peak. This climb likely contributed to the recent cooling in home sales, particularly among budget-sensitive buyers.
For many Houstonians, a mortgage rate nearing 7% significantly impacts affordability. A $350,000 mortgage at 6.5% interest equates to about $2,212/month in principal and interest, compared to $2,388/month at 6.85%. That difference can make or break buying decisions for many families.
The rise in rates also affects sellers. Buyers who qualify for less may submit lower offers or ask for closing cost assistance. It’s crucial to understand how rates affect your buying power. Check out this blog for actionable ways to shop for the best loan and improve your approval odds.
RENTAL MARKET UPDATE
The rental market in Houston remained resilient this spring. Lease activity ticked up by 1%, and rents continued their upward march. The median monthly rent rose 5% to $2,100, while the average reached $2,227.
Despite slightly higher prices, the rental market is starting to show signs of moderation. Units are now taking an average of 43 days to lease—up from 37 last year. This suggests that renters are becoming more cautious or simply have more choices. For landlords, that means pricing strategically and offering incentives like free rent or flexible lease terms may help avoid long vacancies.
From a tenant’s perspective, the rise in rent prices continues to put pressure on monthly budgets. Many renters are now reassessing whether it’s more cost-effective to continue renting or transition to homeownership. If you’re unsure where you stand, this guide on buying vs. renting in Houston can help clarify the long-term financial implications.
Investors should take note: consistent rent increases, coupled with longer leasing timelines, suggest a window of opportunity. Rental demand is still high, but the days of instant lease-ups may be waning. Proper property management and competitive pricing will be key.
INDUSTRY NEWS
🏙️ Downtown Revitalization Project Expands
Houston’s $500 million downtown revitalization initiative is moving into phase two, with an emphasis on walkability, mixed-use development, and expanded green spaces like Buffalo Bayou Park. The project aims to boost urban living appeal and is expected to drive increased demand for housing in nearby districts like East Downtown (EaDo), Midtown, and the Washington Corridor.
🚗 I-45 Expansion Update
TxDOT continues progress on the I-45 expansion, a massive infrastructure project aimed at reducing congestion and improving access from the suburbs into the city. While short-term construction could impact traffic and property values near the freeway, long-term benefits could attract more buyers to neighborhoods along the corridor like Independence Heights and Near Northside.
🏘️ Build-to-Rent Gaining Momentum
Build-to-rent communities are gaining ground in Greater Houston, particularly in growing areas like Cypress, Katy, and Pearland. With more buyers priced out of homeownership, investors are creating single-family rental neighborhoods as a long-term asset play. Expect to see this segment grow throughout 2025.
PREDICTIONS
🔮 What’s Next for the Houston Housing Market?
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More balanced market conditions: With inventory rising and days on market stretching, Houston is drifting from a seller's market toward neutral ground.
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Softening in the condo and townhome space: The multifamily segment will continue to face pressure from rising rates and high inventory, giving buyers more negotiating room.
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Rent increases to slow mid-year: While rental prices are still rising, resistance from tenants will likely slow the pace by summer.
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Rates to remain in the high 6% range: Unless inflation drops faster than expected, mortgage rates may hover between 6.5–6.9% through the summer.
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Smart pricing will be key: Sellers who price strategically and prep homes properly will have the best shot at attracting motivated buyers.
If you’re planning to buy or sell in 2025, it’s more important than ever to work with a real estate expert who knows how to navigate shifting conditions. Let’s talk about your strategy.
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