Could the North Texas house-buying frenzy finally be cooling off?
According to real estate data, the housing market is still relatively hot, but showing signs of a slow decline. Since summer, numbers have been falling from high points that began their climb during the 2020 pandemic, which saw growth in both houses sold and the average value of properties.
Since 2020, the limited number of houses available in the DFW area caused buyers to scramble in the hopes of picking up any remaining properties. Buyers faced stiff competition and often had to pay more than the asking price.
In July 2020, for example, an all-time record number of homes, 2,922, were sold in Dallas County. From 2020 to 2021, the percentage of houses in the area that sold for between $500,000 and $1,000,000 increased by roughly 6.5%.
The market continued to rise in both metrics through this last April, with housing costs in the Dallas-Fort Worth area growing by 31% compared to the national average of 20.4%, according to the S&P CoreLogic Case-Shiller Index.
In April, the median closing price of a single-family home in DFW had soared a whopping 25.00% year over year, to $425,000, according to the Texas Real Estate Research Center at Texas A&M University.
During the summer of 2018, the median single-family home price in the same area was $260,000.
Despite much higher prices compared to previous years; the growth of the market then began to shrink. In May 2022, the median single-family home price had risen 22.62% year over year; in June, DFW home prices rose 20.83%; in July, 15.10%; and in August, 14.73% to $413,025.
“It’s still a seller’s market,” Elizabeth McCoy, a Fort Worth real estate agent, told The Texas Tribune. “But certainly, we’re seeing buyers be able to have a little bit more choice. And that’s such a good thing.”
Experts like McCoy attribute the declining growth index to two reasons: higher mortgage rates and inflation.
During the pandemic, mortgage rates were at a record low, encouraging more people to buy houses. The great demand for houses saw an increase in home prices nationwide. As mortgage rates begin to rise once again, however, it will become more expensive to finance a home.
Inflation rates have also skyrocketed, causing houses to cost more and the purchasing power of the dollar to decline. These factors combine to create a less-than-ideal market heading into the next quarter. Despite this, the DFW housing market still remains one of the most competitive in the nation.
