Houston's Listings Rose 0.5%. Its Sales Fell 11.5%. The Extra Supply Came From the Buyer Side.

By Steve Waller · September 23, 2026

What the August report actually says

The Houston Association of Realtors' August numbers are the ones worth reading twice this month, because the headline and the mechanism point in opposite directions.

The figures, from HAR's own monthly update:

• 7,100 single-family closings, down 11.5% on the year.
• 38,947 active single-family listings, up 0.5% on the year.
• 5.3 months of inventory.
• 54 days on market, against 52 a year ago.
• Median price $330,000, down $5,000 on the year. Average price $426,760, up 1.2%.
• 7,939 pending sales.
• Across all property types: 8,362 sales, down 10.2%, against 60,390 active listings, up 1.0%.

The supply build is not coming from sellers

Months of inventory is a ratio: active listings divided by the pace at which they are selling. Put the two Houston numbers next to each other and the arithmetic does itself. Listings rose half a percent. Sales fell eleven and a half.

Houston did not get a wave of new sellers this year. It lost buyers, and the same pile of houses now takes longer to clear.

That distinction is worth money to anyone buying. A supply build made of new listings means sellers arriving with a reason to move, and reasons to move produce price. A supply build made of a falling sales pace means the same sellers are still standing there, unsold and unhurried, and nothing about the calendar has yet given them a reason to come down. If your offers have been getting flat refusals on houses that visibly need work, this is the number behind it. Record inventory is not the same thing as motivated inventory.

Two years of this, in four numbers

August 2024 to August 2026, same market, same report:

• Active listings 30,841 to 38,947 — up 26.3%.
• Months of inventory 4.5 to 5.3.
• Days on market 47 to 54.
• Median price $336,940 to $330,000 — down $6,940, or 2.1%.

Two years of a twenty-six percent inventory build has taken about two percent off the typical Houston price. That is the number to hold on to the next time someone tells you the market is capitulating. It is not. It is sitting.

Houston against the country

The National Association of Realtors put August existing-home sales at a 3.98 million annual rate, with 1.62 million homes for sale, a 4.9-month supply, and a national median of $429,100. In the South the annual rate was 1.84 million with a median of $366,500, up 0.7% on the year.

So Houston carries more supply than the country does — 5.3 months against 4.9 — at a median price roughly $99,000 below the national one and $36,500 below its own region's. NAR also reports a national figure of 31 days on market against Houston's 54. The two are not built the same way and should be read as direction rather than as a like-for-like gap, but the direction is not flattering.

The gap between contracts and closings

One line in the Houston release deserves more attention than it usually gets. Pending sales were 7,939 against 7,100 closings, and pendings were down about 3.5% on the year while closings were down 11.5%.

Contracts are still being written at close to last year's pace. A larger share of them is not reaching the table. This brief is not going to tell you why from a monthly aggregate — appraisal gaps, insurance binding, and financing falling apart are all candidates and the report does not separate them. What it does tell you is where to put your attention on your own file. If you are underwriting a resale, the assumption that a signed contract is a closing is worth less this year than it was last year, and the cost of finding that out late is a full extra month of carry.

What all of it does to the purchase test

None of this changes the arithmetic that decides whether a deal works. It only changes how little room the arithmetic leaves.

After-repair value, times 70 to 75 percent, less repairs, less closing costs, equals the most you can pay. That is the whole test, for a flip and for a rental alike.

Run it at Houston's own median. On a $330,000 after-repair value with $45,000 of repairs and $12,000 of closing costs, the test allows $174,000 at seventy percent and $190,500 at seventy-five. If the seller of a house that appraises out at $330,000 finished wants $245,000, there is no structure, no lender and no amount of optimism about the rehab budget that turns that into a deal. The gap is the answer.

The market data says why the test has to be obeyed rather than negotiated with. ATTOM's most recent home flipping report put the Houston gross flipping return at 7.2% against a national 25.4%, on a national average of 165 days from purchase to resale and a national gross profit of $66,000. Seven point two percent is gross — before a dollar of rehab, before carry, before selling costs. And note that Houston's 54-day average is only the listing window. The rehab sits in front of it and the close sits behind it, which is how a 54-day market produces a 165-day hold.

A market paying 7.2% gross over roughly half a year does not reward patience or nerve. It rewards the purchase price, and nothing else.

Rates, briefly

The ten-year Treasury closed at 4.96% on Monday and 4.96% again on Tuesday, after finishing last week at 5.01%. It started September at 4.79%.

Two flat sessions is not a trend, and it is the first repeat print since the first two days of the month — everything between them moved every single day. Freddie Mac's weekly survey last read 6.95% on 17 September, against 6.76% the week before and 6.26% a year ago. Thursday brings the next one.

The week ahead

• Thursday, 24 September, 9:00am Central. Census and HUD publish New Residential Sales for August. July's release put the new-home median at $393,800, and with 38% of builders now cutting prices this is the release that shows whether the cuts are buying any volume.
• Thursday morning. Freddie Mac's Primary Mortgage Market Survey. Last print 6.95%.
• Every afternoon. The Treasury's daily par yield curve. Two flat sessions at 4.96% either becomes a floor this week or it does not.
• Thursday, 1 October. Census Construction Spending for August.

Sources

• HAR Monthly Housing Update and MLS Sales Activity, August 2026
• HARConnect, Houston Housing Inventory Hits Highest Level in a Decade as Home Sales Slow in August (August 2024 data)
• National Association of Realtors, Existing-Home Sales, August 2026
• US Department of the Treasury, Daily Treasury Par Yield Curve Rates, September 2026
• FRED DGS10, 10-Year Treasury Constant Maturity Rate
• Freddie Mac Primary Mortgage Market Survey, 17 September 2026
• ATTOM Q1 2026 US Home Flipping Report
• US Census Bureau, New Residential Sales, July 2026
• US Census Bureau economic indicator release calendar
• NAHB, Builder Sentiment Falls on Higher Interest Rates and Costs, 16 September 2026

Market data is from public sources and is provided for information only. Nothing here is an offer of credit, a rate quote, or investment advice. Financing is subject to underwriting, lender approval, appraisal or valuation, title, insurance, property eligibility and program availability.

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