Home sales are falling behind in North Texas’ housing market boom.
For the first time in 2022, the North Texas region’s home sales hit a decline, according to the Dallas Morning News. North Texas only had 767 new listings hit the market in March — down 93 percent from March 2021.
Homes priced under $250,000 had the largest sales declines, with 46 percent fewer sales than the same time last year, based on the latest numbers from the Texas Real Estate Research Center at Texas A&M University and North Texas Real Estate Information Systems.
Homes under contract but not yet sold plunged 61 percent— signaling even bigger declines in the coming months.
This March, there were just 2,418 homes on the market in North Texas, an 88 percent drop from March 2020, when there were 20,853 homes for sale. From just a month ago, the number of homes on the market has halved.
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With mortgage rates rising, buyers at the lower end of the market could see the most severe impact in affordability, says Bryan Glasshagel, senior vice president of housing market research firm Zonda. In the research company’s latest report, Glasshagel suggests that the increase in home prices seen throughout the pandemic has already been offset by low mortgage rates.
“The last month is really where we’ve seen that first sustained push up in mortgage rates, so I think that’s going to be the wild card going forward,” Glasshagel said. The average 30-year fixed-rate mortgage rate was 4.72 percent the week of April 7, according to Freddie Mac.
As builders continue to face supply constraints amid continued demand, Texas’ housing inventory has been rapidly shrinking since the pandemic.
As the state’s housing supply shortage worsens, home prices continue to rise. The median sale price in the state has risen 22 percent since March 2021, from $311,500 to $380,000. Since March 2020, it has soared by more than 40 percent.
Late last month, the Federal Reserve Bank of Dallas outlined what it saw as abnormal U.S. housing market behavior based on fast-growing home prices, which is beginning to rival the boom of the early 2000s. The price-to-rent ratio, in particular, and the price-to-income ratio were cited as signs of a potential housing bubble caused by “housing market fever.”
“Some people are hoping or thinking that there will be more inventory later this year because the interest rates are going to probably slow things down a little bit,” Todd Luong, a real estate agent with Re/Max DFW Associates, told DMN. “But I don’t think that anybody can confidently say that it will happen.”
[DMN] – Maddy Sperling