North Texas Housing Market Ends Year With Price Gain, But Fewer Sales
Median prices inched higher but remain below recent highs.
With mortgage rates down from summer highs, the North Texas home market ended the year with a small gain in prices but fewer sales.
Dallas-Fort Worth real estate agents sold 6,416 homes during December – about a 6% decline in purchases from December 2022, according to data from the MetroTex Association of REALTORS® and the Texas Real Estate Research Center at Texas A&M University.
Median sales prices last month were $389,945 – a 1.3% increase from a year earlier.
But North Texas home prices were still lower than in 2021 when the median edged above $400,000. Existing home sales prices have more than doubled in the last decade.
DFW home sales and prices declined in 2023 as mortgage rates soared over the last year.
After peaking at about 8% a few months ago, average mortgage costs are just under 7% for a long-term fixed-rate loan.
Dallas housing analyst Ted Wilson doesn’t see a coming run-up in home prices even if mortgage rates drift lower.
“Affordability remains a significant challenge for prospective buyers, so we only expect modest housing inflation in 2024,” said Wilson, principal with Residential Strategies. “Buyers are unlikely to bid up houses like they did back in 2021 when mortgage rates were much lower.”
The Texas Real Estate Research Center is also anticipating only slight price changes this year.
“We are calling for flat to slightly softer prices by end of 2024 – that is a statewide forecast,” said Daniel Oney, Research Director, with the Texas Real Estate Research Center. “Local results will vary. Austin had the biggest run up, and prices pulled back the most there.
”DFW had a less dramatic increase and a more modest adjustment after interest rates went up.”
The supply of homes listed for sale with real estate agents in North Texas in December was less than 20,000 – still a thin supply.
“There continues to be a tight supply of existing home listings, which historically has produced an inflationary situation,” Wilson said. “With many homeowners remaining ‘house-locked’ – unwilling to walk away from a 3% to 4% home mortgage – we don’t think the number of new homes coming to the market will change much in the coming quarters.”
A shortage of preowned homes for sale has sent many North Texas buyers to the new home market.
Last year, DFW builders sold a record 52,600 houses and new home starts in North Texas were up 50% in the fourth quarter.
For all of 2023, real estate agents in North Texas have sold more than 84,000 homes – down from more than 100,000 sales in 2022.
Tarrant County had the largest number of home sales in December with 1,574 houses changing hands. Sales in Tarrant County fell more than 8% from December 2022.
Dallas County was second with 1,410 sales. Dallas County median sales prices for the month were $360,000 – an increase of 9.9% year-over-year and the biggest gain in North Texas.
The highest median prices last month were in Collin County at $475,000. Colin County prices were down about 3% from a year earlier.
Because of large population gains in North Texas, the DFW market continues to see strong demand for housing. The National Association of Realtors has forecast that DFW will have one of the best home markets in the country this year.
Source: Dallas Morning News