Although the market may be improving for some prospective buyers, home values in Dallas last year were lower compared to the previous year, according to a report from Zillow.
“Buyers found significant savings as rates fell,” Zillow chief economist Skylar Olsen said in a press release.
“But mortgage rates are fickle things, as we’ve seen in recent weeks, and they’ll play a massive role in determining appreciation and affordability — especially for first-time buyers — going forward in 2024. Fortunately, rate lock appears to be wearing off for some homeowners, who show encouraging signs that they’re ready to come back to the market.”
In December, the typical home value in the U.S. was $344,000, and the mortgage payment was $1,790. But values were down the most in seven major metro areas — Dallas (-0.5%), Jacksonville (-0.5%), San Antonio (-3.3%), Austin (-7.2%) and New Orleans (-8.1%). In Dallas, the Zillow Home Value Index for the typical home was $363,613, a decrease of 0.7% from the previous month.
Meanwhile, a Zillow survey completed in the fourth quarter of 2023 found that 21% of homeowners are considering selling in the next three years — up from 15% a year ago. It also shows that the share of homeowners considering selling was almost the same whether they had a mortgage rate above or below 5%.
“That’s a big change from six months ago, when homeowners with rates above 5% were nearly twice as likely to consider selling,” according to the press release. “The survey data shows that more owners with low rates are warming up to the idea of selling, while those with higher rates probably purchased their house fairly recently. Current mortgage rates look to be less of a determining factor when considering a sale.”
And the drop in monthly mortgage payments has returned affordability back to home-buying, at least by some definitions, Zillow said.
“For the first time since April, a new mortgage at 20% down now takes less than 33% of the median household income. But that’s a national average. Prices are so high that the median household can’t even qualify for a mortgage in many expensive metros.
“A 20% down payment is a high bar, too, especially for first-time buyers. Half of all buyers put less money down, and half of first-time buyers use either a gift or a loan from family or friends to fund their down payment.”
Other factors come into play during the home-buying process, such as inventory levels and competition for properties.
“The flow of new listings to the market is slightly better than a year before, and although levels are 14.5% below pre-pandemic norms, they seem to be trending in the right direction,” the press release reads.
“Time will tell if that progress continues in 2024. A lack of choices means buyers are unlikely to find price cuts, and they should expect competition for the most attractive listings. Price cuts are never popular in the winter, and this December, the share of listings with a price cut was just under 16% — the lowest since April 2022.”