Dallas/Ft. Worth Home Prices Continued Steady Climb in April
DFW home prices are continuing to rise at a steady pace according to the S&P CoreLogic Case-Shiller Home Index.
For the 8th month in a row, home prices were up for the entire DFW region in April. According to the Case-Shiller Home Index (which many economists believe is the best gauge of home prices) for Dallas/Ft. Worth, prices rose 3.43% on a year-over-year basis. On a month-over-month basis, prices rose by 1.17%.
While this growth rate is a far cry from what we experienced just a few years ago, what we are experiencing now is a slow and steady rise in home prices across the entire DFW region. To be honest, this is probably the most beneficial type of growth for the most people. Homeowners can't expect to buy and sell a home within a year for a profit (when you account for closing costs) like they could do a few years ago, but their investment is still increasing in value. And, buyers seeking to get into the market are not facing the stiff competition they saw a few years ago. The result of this is a much healthier housing market for the masses.
DFW Home Price Action At a Glance
Looking at the chart above, we can see how home prices in DFW are continuing their overall trend upward. As I've mentioned in the past, the middle of the graph with the steep slope is an anomaly. Yes, homeowners benefitted financially from the sudden and drastic climb in prices between 2020 and 2022, but that kind of price movement is simply not sustainable over the long run. In order for the market to remain within reach of more buyers, we need prices to rise more slowly, and that is exactly what we are seeing now.
As a reminder, the Case-Shiller Index is a robust index that eliminates most anomalies that might be present in the raw MLS data. For example, if a couple sold their home to one of their children at a deeply discounted price, this could skew the average or median price values in the MLS. The Case-Shiller Index seeks to eliminate situations such as this in order to provide a more accurate gauge of what the housing market is actually doing.
Rates Were Also Higher in April
While home prices were higher in April, mortgage rates were also higher. The 30-year rate sat at 7.17% at the end of April according to mortgage giant Freddie Mac. Since April, rates have come down a little (as of 6/27/2024 they were at 6.86%), so it will be interesting to see if we see any increase in home sales during June.
The fact that rates were so high and prices still rose in April is yet more confirmation that the real estate market is not falling off a cliff. In fact, the market is continuing to demonstrate great resilience. If the market were truly starting to soften, we should have seen weaker pricing figures in April when rates were over 7%. Instead, we saw increased home prices, and this tells me that demand in the DFW area is continuing to be strong in spite of what interest rates are doing.
Conclusion
I know it seems like I'm a broken record. Month after month I'm telling you that DFW home prices are going up even as mortgage rates are going up. Clearly, the Dallas/Ft. Worth housing market is strong, and there doesn't seem to be anything that can stop the momentum.
With home prices up almost 3.5% and mortgage rates starting to come down at the end of April, I would be surprised if prices didn't rise even more in May and June. Let me continue my broken record message by saying that if you are in the market to buy a house in the DFW metroplex, there is no better time than now. This month will be better than next month from a financial perspective, just as last month was better than this month, and next month will be most likely be better than the following month. I don't say this to try to pressure anyone into buying a home. I understand that there are many factors that go into the timing of homebuying. I'm simply stating a mathematical fact from the standpoint of home prices. As prices continue to rise steadily, the sooner you make your purchase, the more return you will likely see from your investment over the long run.