North Texans appear to be holding off on purchasing homes as mortgage rates persist at high levels despite two cuts from the Federal Reserve so far this year.
In October, Dallas saw a greater supply of available homes than demand, with the average property selling for approximately the asking price during the month, according to Realtor.com. This implies Dallas was a buyer’s market last month even though the Federal Reserve cut interest rates by 75 bps since September, a move that would typically encourage more buyers to enter the market.
While the Fed has lowered rates, dropping a massive 50 bps cut in September followed by a more modest 25 bps cut earlier this month, mortgage rates remain elevated. Earlier this week, The Dallas Express reported that the average 30-year mortgage in the United States stood at 6.78% as of November 14. That is up from the 6.08% average rate seen at the end of September, after the first half percentage point cut had already been implemented. This is notable since the Federal Funds Rate typically influences the rates consumers obtain when borrowing.
The North Texas real estate market also saw lower prices last month. The median listing in the Dallas-Fort Worth-Arlington metropolitan area was down 3% year-over-year to roughly $434,500.
In Dallas proper, the median listing last month was $449,000, down nearly 6% from the same period the year before, and the actual median home sale price was just $374,700.
Currently, the city has 3,697 active listings. The median number of days on the market is currently 55, up slightly from 52 in September and substantially higher than March’s 38 days, the lowest month of the year thus far.
While values have pulled back, the reduction follows multiple years of accelerating prices in Dallas and across the Lone Star State. Between 2020 and 2022 alone, median prices in Texas surged almost 31%, increasing from $259,990 to $340,000.
