Home buying activity and prices in North Texas slumped in September as mortgage rates rose to the highest in more than 20 years.
The median single-family home price in Dallas-Fort Worth returned to $400,000 in September, down 3.6% from this summer's high of $415,000, according to the latest report from Texas Real Estate. It was flat compared to the previous year. Texas A&M University Research Center and North Texas Real Estate Information System.
There were 6,735 homes sold in the region in September, a 13% decrease from the same month last year. This report primarily includes existing homes, but also includes new homes sold by real estate agents. This does not include homes sold by builders who had strong summer sales due to a drought in existing homes.
After 44 days on the market in September, homes sold for an average of 96% of list price, according to the report. Although the number of new listings was down 10% year over year, the number of active listings increased by 5% as homes sat on the market for longer periods of time. The metro area had 2.8 months of housing inventory, which is still well below the roughly 6 months that would indicate a balanced market for buyers and sellers.
On Oct. 5, the average interest rate on a 30-year fixed-rate mortgage reached 7.49%, the highest level since 2000, according to Freddie Mac. Higher mortgage rates led to fewer mortgage originations in September, dampening industry optimism, according to the Texas Real Estate Research Center.
Texas Mortgage Bankers Association President Matt Kiker said in a statement provided by the A&M Research Center that “the normal seasonal downturn in home sales is due to a decline in affordability caused by rising home prices and rising interest rates. This was further magnified by the lack of “We expect interest rates to continue at a moderate pace until they stabilize, but many expect them to stabilize in the second half of next year.
“While Texas mortgage bankers are not expecting lower interest rates or an increase in housing supply, there is still an opportunity for Texas homebuyers.”
Other economists said the U.S. unemployment rate was unchanged at 3.8% from August to September, especially in light of new numbers from the Labor Department that showed employers added 336,000 jobs more than expected. , expects interest rates to continue rising into next year. September work.
Todd Luong, a real estate agent with Re/Max DFW Associates in Frisco, has a client who is thinking of selling her house and moving into a smaller home after her husband's death, but in reality she would rather live in a larger home. I found it to be affordable. Given her monthly payments, she would need to buy another house with a new mortgage.
“Many buyers who were planning to buy this year were waiting for interest rates to drop,” Luong said. “In fact, buyers are a little nervous because they thought interest rates were going to go down but they actually went up.”
Luong said young buyers in particular are struggling to find a home within their budget, given the impact of rising interest rates. He said some of his clients are first-time homebuyers looking in the Frisco and Plano areas who can't afford the monthly payments even if they have decent jobs.
“They're a lot more sensitive to interest rates now,” Luong said, adding that there are still fewer existing homes for sale in Plano and Frisco than in other parts of the region, further limiting buyers' options. He added that it has been done. “It's been tough. Some buyers are currently on hold.”
Amanda Rupley, a Frisco real estate agent, told Compass that some properties are receiving multiple offers, while other sellers are being forced to lower their asking prices.
“What really matters is who you talk to,” Rapley said. “I've talked to agents who are in a complete panic because nothing is happening. I've also talked to agents who feel like they're drowning because they have so much on their plate. I did.”
Rupley said the market is still strong, but it's just not as strong as it was during the busiest years of the past few years, when mortgage rates hit record lows.
“People have this idea of marrying the house and dating the rate,” she said. “They're either willing to pay cash or they're coming in knowing they're going to refinance in the next few years.”
Rupley also said interest rates have significantly slowed investors' buying. “From an investment perspective, it's hard to justify paying a mortgage if you don't have cash, even given the rents that are acceptable at this point and the spreads in the flip market.”
Courtney Bailey, a real estate agent with Douglas Elliman in Dallas, said she has two clients who are looking to buy outright or step up and are willing to pay cash, but the right home just isn't on the market. He said he was just waiting for him to come out.
“Low inventory is holding them back,” she says. “As soon as they find a suitable home, they are willing to pull the trigger.”
