North Texas housing market ends year with price gain, but fewer sales

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.

D-FW 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.

”D-FW 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, D-FW builders sold a record 52,600 houses and new home starts in North Texas were up 50% in the fourth quarter.

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