DFW New Home Sales Show “Remarkable Stamina”

Real Estate

A home is pictured with a "For Sale" sign out front | Image by paulbr75/Pixabay

The market for new homes in Dallas-Fort Worth (DFW) remains strong despite a broader slowdown.

New homes in the DFW metroplex are taking longer to sell and are fetching less, but overall sales still show “remarkable stamina,” according to a new HomesUSA.com New Home Sales (NHS) Report.

DFW’s housing market has remained strong “due to the market’s business-friendliness and its perception nationally as an excellent place to raise a family,” Ben Caballero, founder and CEO of HomesUSA, told The Dallas Express via email. The DFW housing market has also remained strong due to “the fact that Texas has no state income tax, which contributes to its desirability,” Caballero said.

New homes sat on the market in North Texas for approximately 94 days in January, an 11-day increase from December and more than 40 days longer than the same time last year, NHS Index data showed.

To compile the report, HomesUSA looked at a range of homebuying metrics based on a three-month moving average that used Multiple Listing Services (MLS) data from the Realtor Associations of Austin, North Texas, Houston, and San Antonio.

The report found that new home sales in January fell in each of Texas’ major markets except for North Texas. In DFW, new home sales rose from 1,458 in December to 1,505 in January, a 3.2% increase month-over-month. In that same time period, Austin saw new home sales fall 4.7%, while Houston and San Antonio suffered a nearly 6% drop.

“Texas new home sales are still showing remarkable stamina — as are Texas builders,”  Caballero said in the report. “Statewide and locally … average new home sales are still strong, despite all of the challenges builders face. In Dallas-Ft. Worth, sales were higher in January than December, which was a record high for 2022.”

However, as inventory levels rise, the number of listings reported to MLS will also increase, Caballero told The Dallas Express. Caballero also added that DFW currently has a “5-month inventory of homes.”

In December 2022, DFW reportedly had just 2.2 months in available houses, according to Norada Real Estate Investments. This would mean that housing inventory has more than doubled since December.

Despite new home sales rising in DFW in January, the statewide average price of a new home actually fell during the month, according to the report.

Caballero doesn’t expect much improvement throughout the year.

“Because of continued interest rate increases, I expect 2023 to be a challenging year for the DFW home market,” he told The Dallas Express.

The three-month moving average price for new homes in DFW fell from $501,789 in December to $501,763 in January. Average prices for new homes in Austin fell from $533,703 in December to $523,931 in January. Houston’s average new home price decreased from $423,512 to $414,728, while San Antonio’s average price fell from $396,487 to $393,316.

New home sales statewide continue to drift away from 100% of the asking price, according to the report. The sales-to-price ratio in DFW was 97.65 in January, a decrease of 0.40 from the month before. Houston’s ratio was 97.20, Austin’s ratio was 96.28, and San Antonio’s ratio was 97.42.

Pending new home sales rose across the board in Texas, NHS Index data showed. In DFW, pending sales rose from 1,773 in December to 2,027 a month later. Austin’s pending new home sales rose from 714 in December to 889 in January. Houston saw pending sales rise from 1,522 in December to 1,655 in January. San Antonio had pending sales rise from 596 to 674.

In terms of the number of active listings, three of the four major Texas markets posted higher active listings. DFW saw active listings rise from 7,513 to 7,526, Houston’s active listings rose from 11,545 to 11,600, and Austin’s jumped from 4,634 to 4,974. San Antonio was the “anomaly,” as active new home listings in January fell from 4,395 to 4,365, according to the report.

The HomesUSA.com monthly report is based on closed sales recorded inside the MLSs by the 10th day of the following month. The report noted that sales reported late by agents are not included.

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