Latest Insights

According to Zonda, in 2Q25, the New Home Lot Supply Index (LSI) in Houston was up 21% from 2Q24, reaching 71.8, signifying that the Houston market remained significantly undersupplied. While the LSI was up year-over-year, builders slowed production due to economic uncertainty and oversupply of homes for resale. The overall housing inventory reached 59,492 active listings in July, the highest on record for Houston and a 27.2% increase from the previous year. The economic uncertainty and the slowdown in builder activity was felt across Texas in 2Q25 as softer demand and rising resale inventory reduced the pace of lot-to-start conversions throughout the State. One local silver lining is that Houston and Dallas accounted for nearly 80% of Texasa€™ new residential permits in May. Local or not, new residential permits being filed proved that even in the face of all the uncertainty, well-capitalized buyers and long-term investors continued to target strategic acquisitions.

The Houston housing market showed positive growth in 1Q25, with a slight increase in new home starts and closings. The annualized pending home sales rose by 12.7%, reaching 9,165 in March 2025, while single-family home closings increased by 2.6%, totaling 7,429. The average home price climbed to $427,221, reflecting a 3.7% year-over-year growth. Today's strong home activity serves as a leading indicator for future land demand rather than a reflection of current land sales and value performance. It typically takes 2-3 years to convert raw land into builder-ready lots, and 6-18 months for construction. Additionally, the unemployment rate stood at 4.2%, while employment growth remained strong, with a 2.4% increase in total nonfarm employment. These economic indicators signal a healthy, expanding market, with continued demand for land and housing development.

In 4Q24, Houston's land market experienced significant growth in the outer suburbs, with Brookshire leading a 144% surge in home sales, largely due to new master planned developments like the Sunterra community. Other areas such as Porter/New Caney West, Conroe Northeast, Waller, Fulshear/South Brookshire/Simonton, and Hockley also saw increased land sales, driven by affordable home prices and new construction. December 2024 saw a notable 16.3% year-over-year increase in single-family home sales, with 7,162 units sold that month. Active listings grew by 21.6%, reaching 45,714 properties, contributing to a balanced market with a 4.0-months supply of inventory.