The 2022 State of Housing in Harris County and Houston

REPORT : Jun. 22, 2022 HOUSING

The third annual State of Housing report looks at the pandemic's impact on the local housing market. The report also sets new housing baselines on mortgage loan data, homelessness and other housing indicators.

The third annual State of Housing in Harris County and Houston report documents a rapidly changing housing environment in Houston and Harris County. Housing prices have increased dramatically and inventory has been low. Because of supply-chain issues, the price of construction materials skyrocketed. Overall, a quarter of Houstonians are having difficulty paying their mortgage or rent. For African-Americans, that number is about 40%. For Hispanics it is 37% and for whites it is 17%—both increasing significantly over last year.

Due to delays in data release from the U.S. Census and the American Communities Survey, the report relied more on data from other sources, especially the Houston Associations of Realtors (HAR) and the Home Mortgage Disclosure Act (HMDA). New data led to the creation of new yearly baselines. Altogether, these new sources and data baselines help us tell a deeper, more nuanced story about our local housing sector.

Key findings include:

Local housing prices have skyrocketed: Houston’s median sales price neared $350,000 in 2021. The median sales price increased by 10% in Houston and 16% in Harris County (countywide).
Demand for single-family homes, which represent the vast majority of the market, is driving up prices and keeping inventory low. In Houston proper, single-family homes make up 84% of the sales volume.
Despite growth in new construction permits, developers were unable to fully respond to high housing demand because of construction costs and supply-chain problems.
Hispanic and Black mortgage applicants face higher interest rates and more denials on lower-valued properties.
Despite challenges in the mortgage market, Hispanic residents will soon become the largest share of homebuyers in the county. Hispanics are the only major racial/ethnic group with a growing homeownership rate in both Houston and the U.S. between 2020 and 2021.
The affordability gap for homebuyers worsened between 2011 and 2021 because of increased housing sales prices. The affordability gap for renters expanded by $100,000 from 2011 to 2021 ($38,000 from 2020 to 2021 alone) as housing prices surged to new highs. In 2021, the countywide median sales price of a home ($285,000) was about twice the price of a home that the county’s median renter can purchase ($149,500).
Renters in the Houston area are experiencing economic hardship and fear of eviction, according to the Household Pulse Survey. More than 10% of renters in the Houston metro area were unable to pay the previous month’s rent or had it deferred at each point in time they responded to the survey between April 2020 and September 2021.
The next disaster will disproportionately affect lower-income communities, and a total of 474,000 rental units are located in census tracts that have high risks for disasters. A significantly higher proportion of Harris County’s rental units (65%) are located in census tracts prone to natural disasters.