While the average down payment on a new home in the Dallas-Fort Worth area has dropped substantially, it remains nearly double what it was just four prior.
Earlier this month, The Dallas Express reported that home affordability in the United States has reached its lowest point since the 1980s. Much of this stems from the rapid appreciation of housing prices. In 2019, the median Dallas-Fort Worth home sold for $275,000. Last year, that number surged nearly 44% to $395,000, The Dallas Morning News reported.
As of December 2023, the average down payment in DFW stood at $91,121, or roughly 16% of the property value. While this represents a drop from the $113,806 average in May 2022, it is still more than 50% higher than the $59,394 average down payment clocked in January 2019.
Coming up with a down payment is just one of the hurdles potential homeowners face. They also grapple with the burden of historically high interest rates, which are further exacerbating the affordability crisis. This week, mortgage rates — which are influenced by central banking policy — climbed above 7% in the United States for the first time in 2024.
It turns out those rates could remain high for longer than anticipated. On Tuesday, Federal Reserve Chair Jerome Powell indicated that the central bank will likely have to wait longer than initially hoped following a series of higher-than-expected inflation readings.
“The recent data have clearly not given us greater confidence and instead indicate that it is likely to take longer than expected to achieve that confidence,” Powell said during a recent panel discussion at the Wilson Center in Washington, per BNN Bloomberg.
Sriram Villupuram, a professor at the University of Texas at Arlington’s Department of Finance and Real Estate, said down payments in Dallas have also been impacted by the city’s tight housing supply.
Last year, housing inventory averaged 2.6 months, according to the Texas Real Estate Center. A six-month supply is considered stable in the housing market, according to Villupuram, per DMN.
