It’s been a down year for home sales in Dallas-Fort Worth, and the future isn’t looking brighter for real estate agents in 2024.
The combination of rising mortgage rates, low housing inventory and declining affordability is expected to continue limiting sales of existing homes through next year, the Dallas Morning News reported, citing an annual forecast from MetroTex Association of Realtors.
In June, 8,750 existing single-family homes were sold in DFW, marking a 4 percent decrease year-over-year. After the post-pandemic housing boom peaked around last summer, there haven’t been many homes left to sell.
Homeowners are reluctant to sell amid rising mortgage rates and soaring home prices, which would require them to purchase new homes in a more expensive market and take on higher monthly mortgage payments.
“It’s quite a shock,” Daniel Oney, an economist for the Texas Real Estate Research Center, told the outlet. “If you’re budgeting for a house, or if it’s a commercial project, your budget’s now blown because the cost of capital is higher.”
Oney predicts that roughly 336,000 homes will sell in Texas by year end, with 93,000 in DFW. The state’s sales levels are similar to 2017 or 2018, while the DFW area lags behind, resembling 2015 levels due to a less dramatic price increase, he said.
Nationwide, single-family home sales were down 15 percent year-over-year in August, and they fell by 8 percent in DFW. The region’s median price of a single-family home reached over $406,000 in August, equating to a 44 percent increase since the pandemic hit and making homeownership less affordable, especially for younger buyers.
The report also highlighted that homes in major Texas metros, including DFW, have become less affordable compared to cities like Atlanta and Chicago, which may impact migration patterns.
Experts suggest that policymakers may lower federal interest rates to influence mortgage rates, but recent Labor Department data showed a stable unemployment rate and unexpected job gains in September, making the future of interest rates uncertain.
Blue Chip Financial forecasts predict a drop in the average 30-year mortgage rate from 7.5 percent to just over 6 percent by 2025, but that’s still significantly higher than pre-pandemic rates, the outlet reported.
—Quinn Donoghue
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