Texas has been witnessing an uptick in home sales as buyers who strategically waited out last year’s sky-high mortgage rates are now pulling the trigger and buying new homes.
This trend has been seen throughout 2024, as Dallas-Fort Worth enjoyed the nation’s second-largest rise in home sales in January, as reported by The Dallas Express. As of January, overall home sales in DFW were up 14.2% year over year, rising to 5,208 in January 2024 from 4,560 in January 2023, according to a RE/MAX national housing report.
In February 2024, the median sale price of homes in Dallas was $212,000, almost $70,000 lower than in February 2023. As sale prices in the city fall nearly one-quarter, the housing market appears to be favoring buyers over sellers.
Despite ongoing decreases, Texas home prices are still significantly higher than they were pre-pandemic. A report by Axios shows that Dallas homes are still 44% more expensive than before the COVID-19 lockdowns.
Katy Song, a chief financial planner of Domain Money, shared her most important tips for first-time home buyers in an interview with Axios.
Her first tip is for them to look at their credit. Taking an honest look at what shape their credit score is in is essential since it will determine whether it is really the right time for them to apply for a mortgage.
As Song explained, individuals with poor credit or no credit should focus on building that credit score. This might include charging recurring subscriptions to their credit card to build that score before venturing into buying a home. Paying off any credit card debt before applying for a mortgage is also beneficial.
Song also suggests that those looking to purchase their first home calculate their maximum monthly payment. She recommends aiming for 28% to 32% of their net monthly cash flow as a safe bet. While the lender will likely approve buyers for a higher mortgage than one could comfortably afford, they aren’t keeping in mind other monthly expenses, such as medical bills or subscriptions.
Lastly, Song encourages first-time home buyers to build their savings for a downpayment. While recommendations vary depending on the home, a general guideline is to save at least 10 to 20% to keep their monthly payments comfortable and start building equity as soon as possible.
Trackbacks/Pingbacks