Dallas Fort Worth Sees Its Third Consecutive Month of Home Price Declines
The North Texas housing market is returning closer to pre-pandemic levels of price growth.
Dallas-Fort Worth home prices rose 16.3% from September 2021 to 2022 but declined in recent months, according to the latest reading of the S&P CoreLogic Case-Shiller Index. From August to September, area home prices declined 2.1%. Local home prices peaked in June and have since declined about 4.4%, the index shows.
U.S. home prices were up 10.6%, down 1% from the previous month. This marks the sixth straight month of slowing annual price growth nationally and the slowest since December 2020.
“As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be more expensive and housing becomes less affordable,” said S&P’s Craig Lazzara in a statement. “Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”
All 20 cities tracked by the Case-Shiller index saw lower price increases in September than they did in August. Miami, Tampa, Fla., and Charlotte, N.C., still saw the highest year-over-year price gains, followed by Atlanta and D-FW.
The slowdown follows the rapid runup in U.S. home prices since 2020. Price appreciation in D-FW soared above 10% in February 2021 for the first time since 2014 and rose to a record 31% year-over-year increase in April.
The Case-Shiller index is a three-month moving average that compares sales price changes of specific properties over time. While it is a couple of months behind current market conditions, the index’s price estimate is considered more accurate than home sales data from agents, which can be influenced by the type of properties that are selling each month.
The average rate for a 30-year fixed-rate mortgage in September climbed from about 5.7% to almost 7%, according to Freddie Mac. It surpassed 7% in October but fell through November, reaching 6.6% as of Nov. 23.
The rapid rate increases have pushed away first-time homebuyers from the market as well as sellers not wanting to move away from homes where they have mortgage loans with sub-3% rates.
“For many homebuyers, the sudden rate surge translated into mortgage payment sticker shock, leading to further pullback from transactions,” said George Ratiu, senior economist for Realtor.com. “We can expect prices to continue declining from their summer peak as we move through the cold winter months.”
Nicole Bachaud, senior economist for Zillow, said the U.S. housing market is rebalancing, noting that the minor drops in prices now are slight compared with the massive appreciation seen over the last two and a half years.
“This rebalancing is already leading the way towards a buyers’ market as buyers are now seeing more negotiating power and an easier, less stressful home shopping experience,” Bachaud said. “While turning points and slowdowns can be uncomfortable in the housing market, they are important to getting back to stability.”
Source: The Dallas Morning News
Post a Comment