DFW Home Prices Rise in October 2023
The Dallas/Ft. Worth housing market saw its second consecutive month of price increases in October.
For the better part of this year, home prices in the Dallas/Ft. Worth area have declined on a year over year basis according to the S&P CoreLogic Case-Shiller Index for the Dallas Metro area. This means that when comparing prices in a given month with the same month from a year ago, this year's prices have been lower.
However, in a sign that the DFW real estate market may be starting to accelerate again, we have now experienced two consecutive months of price increases. September was basically break-even with a 0.26% increase from a year earlier. In October, however, prices rose 1.23% from a year ago. This is a pretty large increase for one of the fall months.
Prices are still down -4.39% from their peak in June 2022, but with two months of increases, it appears we may have experienced the low point in this market.
As many of you are aware, the confluence of higher mortgage rates and high home prices over the last year and a half has led to a bit of a stall in the housing market nationwide, including the DFW area. Now that we have had a number of consecutive weeks of declining mortgage rates, some buyers are starting to come back into the market, and this is creating more demand, which is leading to higher home prices.
As a local Realtor, I still have several clients and potential clients who are reluctant to buy right now, so by no means does this mean we are about to experience 2021 and early 2022 demand again. It is my opinion that we will not see drastic changes in interest rates in either direction in 2024. In the absence of drastic changes, lots of lenders are starting to get more creative with ways to sell loans. Some are selling 40-year products. Some are creating programs with closing cost grants or other ways to pay for closing costs, and some are finding other creative ways to lower the rate on a mortgage. As these mortgage tools continue to develop, I think we will see more people buy homes who have been sitting on the fence waiting for the home-buying environment to impove.
The S&P CoreLogic Case-Shiller Home Indices are robust indices designed to track the price of single family homes in various metropolitan areas across the U.S. as well as the nation as a whole. Each index tracks the price of matched pair sales (i.e. same home selling multiple times) using arms-length sales data. In other words, the indices seek to weed out homes that sell to relatives or friends at below market values. They also weed out sales like investment homes that sell at reduced rates due to poor home conditions.