Prices of existing homes in Dallas-Fort Worth are higher than newly built homes, a rare occurrence that highlights how much the market has changed since last year.
The median price of a new home in DFW dropped 6 percent from roughly $423,000 in June 2022 to $398,000 in June 2023. Simultaneously, existing home prices climbed 9 percent since the start of this year to a median of $410,000 in June, the Dallas Morning News reported, citing a study by housing consultant Residential Strategies.
This anomaly is driven by low housing inventory. While plenty of would-be buyers are refraining from house hunting amid high interest rates and economic uncertainties, a lack of options has led to a surge in demand among those who are on the hunt for new digs. Thus, the imbalance of supply and demand has forced sellers to elevate prices, Residential Strategies principal Ted Wilson told the outlet.
Builders, however, are reaching into their bag of tricks to keep prices of newly constructed homes relatively low, offering discounts and incentives. One tactic to reduce prices is rate buy-downs, which allows builders to pay a portion of a home’s cost upfront to lower the interest rate, essentially discounting the property without changing the asking price.
Plus, builders are focusing on smaller, less expensive projects to create a more affordable product. As of June, about 66 percent of homes on the market in DFW were on lots smaller than 60 feet wide, up from 41 percent almost a decade prior.
Friendlier price tags have also led to a disparity in sales between new and existing homes. Last quarter, builders in the region sold 14,397 new homes, marking a 4.7 percent increase year-over-year. However, 8,750 existing single-family homes were sold in June, which was down 4 percent from June 2022.
—Quinn Donoghue
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