U.S. Home Prices Reach All-Time High as DFW Prices Plateau
Local and U.S. home prices rose for six consecutive months up to July.
A key measure of the U.S. housing market showed July as the sixth month in a row where home prices grew slightly locally and nationally from the previous month. National prices reached a new all-time high, despite higher mortgage rates than in previous years.
Dallas-Fort Worth sale prices increased 0.3% from June to July, a slower growth rate than the 0.7% reported from May to June, according to the S&P CoreLogic Case-Shiller home price index. U.S. prices grew 0.6% to a new all-time high on the index, while DFW prices haven’t yet surpassed their record high in June 2022.
Despite the slight gain on the July report, a separate report based on more recent transactions showed DFW prices finally began to decline in August. Those numbers, from North Texas Real Estate Information Systems, the listing service used by real estate agents, showed the median sale price of a local single-family home was $406,000 in August, down 2% from July.
“After a strong 5% cumulative U.S. home price gain since the early spring, monthly increases are plateauing to a seasonal average, which reflects the pressure that higher mortgage rates have put on affordability,” CoreLogic chief economist Selma Hepp said in a statement. “As a result of the early 2023 growth, annual price appreciation should accelerate in the coming months before slowing again. Areas in the Midwest continue to lead the national gains given their relative affordability.”
The Case-Shiller index is a three-month moving average that compares sales-price changes of specific properties over time. While it is a couple of months behind current market conditions, the index’s price estimate is considered more accurate than data from agents, which can be influenced by the type of properties that are selling each month.
In March, DFW prices fell 1.2% to mark the first year-over-year decline on the Case-Shiller index since February 2012. The index shows local prices were still down 3.8% in July from their pandemic peak in June 2022.
“I really don’t see [home prices] going down much more,” Belinda Epps, president of the MetroTex Association of Realtors and broker and owner of Epps Realty in Mesquite and Royse City, told The Dallas Morning News earlier in September. “We don’t have enough houses yet. Even though inventory is picking up, it’s still not where it needs to be in order to balance out this market. It’s just not there yet.”
U.S. home prices were up 1% in July from a year before while DFW prices were down 3.4%, according to the Case-Shiller index, which tracks 20 local markets. DFW is the only Texas housing market included on the list.
Nationally, “buyer demand continues to outmatch housing supply, creating upward pressure on home prices despite the fact that home purchase costs are taking up an outsized share of household incomes,” Realtor.com economist Danielle Hale said about the data.
Chicago, Cleveland and New York home prices were up the most from a year ago, but by no more than 4.4%. Las Vegas, Phoenix and San Francisco saw the biggest declines of, at most, 7.2%.
“Markets that saw home prices reset following the recent surge in mortgage rates are expected to see stronger gains over the next 12 months, particularly those in the West,” CoreLogic’s Hepp said.
All of the metro areas that did not hit all-time highs in July were in the Pacific or Mountain time zones except for DFW and Tampa.
Despite higher home prices than in previous years, DFW remains a relocation hotspot, ranking No. 8 on a Redfin report showing how many people on the search platform looked to leave their metro areas for other regions during the summer months. Redfin’s research showed Los Angeles as the top origin of people who looked to move to North Texas.
Source: Dallas Morning News