The single-family home market in North Texas is facing a never-before-seen price disparity between new and existing homes.
The median price of a new single-family home in Dallas-Fort Worth was $398,000 in June 2023, about $12,000 less than a pre-existing home during the same month, according to Dallas-based consulting firm Residential Strategies, reported The Dallas Morning News.
Over the last 12 months, new single-family home prices have dropped 6%, falling from $423,000 in June 2022 to $398,000 in June 2023. Meanwhile, the market for existing homes has increased 9% year over year, rising from around $380,000 in 2022 to $410,000 in 2023, data from the consulting firm show.
DFW’s price anomaly has primarily occurred due to the lower cost of construction and the sharp uptick in mortgage rates over the last year, according to Ted Wilson, principal at Residential Strategies.
It’s not just the lower cost associated with new home construction driving the historic price fluctuations in DFW. Wilson suggests that existing homeowners who locked in an advantageous mortgage rate in 2021 and 2022 are also partially contributing to the median price difference.
“Homeowners just don’t want to walk away from an unreplaceable 3% mortgage,” said Wilson, per the DMN.
“This departure from the historical trend is likely [a] result … of the extremely tight housing inventories in the existing-home market and the pressures it puts on price,” he said during a recent real estate seminar, per the DMN.
While many would-be homeowners are trying to make sense of the local housing market, others are waiting for a housing correction before they consider entering the market, according to Matt Haistings, a Compass real estate agent at the firm’s Plano office.
“A lot of buyers that I talk to are holding out. I think it’s wishful thinking, but they’re holding out for like a big drop in prices or a big drop in interest rates, and I’m not sure we see either of those things in 2023,” said Haistings, per the DMN.
DFW reported 8,750 home sales in June, a 4% decrease year over year, according to housing data from North Texas Real Estate Information System and the Texas Real Estate Research Center at Texas A&M University.
The North Texas metro had about 2.5 months of available supply in June, with the time spent on the market averaging 41 days, local housing data show.
“A year later, all of those people that held off there, they’ve either already purchased or they’re in a frenzy to purchase because they realize, rates have not come down, but prices continue to climb,” Jason Dickson, owner of mortgage lender Nuwave Lending based in Grapevine, told the DMN. “I’m seeing strong demand and still multiple offers.”
