Annual home prices are up nearly 4% in some parts of North Texas.

The Dallas-Plano-Irving CBSA (Core-Based Statistical Area), a U.S. geographic area defined by the Office of Management and Budget, increased by 3.7% year over year in November and by 0.3% compared with October 2023, according to the latest Monthly Home Price Index report by First American Data & Analytics, a division of First American Financial Corporation (FAFC).

“The October spike in mortgage rates thankfully retreated in November, providing an affordability boost to prospective buyers and fueling home price appreciation, said Mark Fleming, chief economist at FAFC. “Preliminary November results indicate that home prices increased for the eighth consecutive month.”

As reported by The Dallas Express, the average rate for a 30-year and 15-year fixed mortgage climbed to 8.03% and 7.35%, respectively, in October, the highest level in 23 years, according to Mortgage News Daily.

Furthermore, the Pending Home Sales Index — a forward-looking indicator of home sales based on the number of contracts currently in escrow — fell to an index level of 71.4 in October, the lowest reading since the index originated in 2001.

Easing mortgage rates in November brought some relief for homebuyers, though, but in general, existing owners kept their homes off the market, which led to further price pressure, according to Fleming.

“This holiday season, homeowners are the ‘grinches,’ hoarding housing supply from willing buyers and keeping upward pressure on prices. However, the new year offers hope to discouraged buyers as sellers’ anchor bias to historically low mortgage rates fades and the potential for slightly lower mortgage rates further improves affordability,” he said.

In terms of the market price distribution of homes in the Dallas-Plano-Irving CBSA, the report notes that home sale prices for low-tier homes (those in the bottom third of the market price distribution) rose by 3.9% year-over-year in November.

Meanwhile, mid-tier homes (the middle third of the market price distribution) rose by 3.2% annually, and luxury-tier homes (those in the top third of the market price distribution) rose by 5.1% year-over-year.

“Unsurprisingly, starter home prices grew the fastest in most markets. Would be first-time buyers hoping to become homeowners usually do so with a lower-priced starter home,” said Fleming. “While the homeownership rate for millennials recently surpassed 50 percent, there are still a lot of potential buyers bidding against each other for the rare starter home that comes to market.”

The five most populous states experienced the following year-over-year growth in the Home Price Index (HPI): Pennsylvania (+8.7 percent), Florida (+5.5 percent), California (+4.5 percent), Texas (+4.3 percent), and New York (+2.2 percent). There were no states with a year-over-year decrease in the HPI, according to the report.