For a fourth consecutive month, North Texas home sales have declined. In September, a total of 7,724 single-family homes sold in Dallas-Fort Worth, a 17% reduction compared to one year prior.
Sellers are reportedly experiencing fewer showings, offers, and, ultimately, fewer closed deals. Misty Michael, a broker associate for EXP Realty, suggested, “Anytime there’s change, people get a little bit cautious, and I think that’s what you’re seeing from buyers right now.”
Median single-family homes in DFW were selling for $404,000 in September, a drop from the $415,000 median price just one month prior.
Despite the month-over-month drop, homes in the region are still up 13% compared to one year earlier and a sizable 50% higher compared to early 2020.
The Federal Reserve’s repeated interest rate hikes have likely contributed to the reduction in activity. Mortgage rates have risen significantly as a result, but house prices have not fallen in lockstep, potentially pricing buyers out of the market.
As of October 6, the average 30-year fixed-rate mortgage was 6.66%, well over double the 2.99% available 12 months ago. For prospective buyers, this means that monthly payments have surged.
While it still appears to be a seller’s market, trends are increasingly moving in favor of buyers. The housing supply in Dallas-Fort Worth has jumped 79% over the past year to over 19,000 active listings.
There are currently 2.4 months of inventory in the region. This number would be closer to six months of supply in a market balanced between buyers and sellers.
Michael added that the situation is “coming back more to a healthy market” but is not necessarily “close to a buyers’ market yet.” She continued on to say, “I don’t think it’s a bubble at all; I think it’s a normalization of the market.”
While last year’s limited inventory drove a flurry of offers when homes were listed, the current environment is transitioning from an auction-style market.
Bill Head, director of communications for the MetroTex Association of Realtors, suggested, “When you have such increased inventory that we’re experiencing now and less buyer demand, you’re going to see the opposite shift.”
Although the overall median prices continue to remain high, the cooling market conditions could signal a more significant shift in the future.