Living in Dallas Fort Worth

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Dallas Housing Market Update: Is the Giant Waking Up?

The Dallas housing market has been in a unique position over the last couple of years, influenced by economic changes, global events, and evolving buyer sentiment. With the 2024 presidential election now behind us, we are seeing signs that the market may be poised for a shift. In this blog post, I’ll cover the current state of the Dallas housing market, key economic indicators, and what it could mean for buyers and sellers as we head into 2025. If you are considering moving to Dallas, Texas, or simply want to understand what living in Dallas, Texas entails, this update will be highly relevant.

Impact of Recent Events on the Dallas Market

Interest Rates and Mortgage Trends

One of the most critical factors influencing the housing market is the movement of interest rates. While the Federal Reserve has cut rates several times in 2024, mortgage rates have remained stubbornly high. This is largely due to their correlation with the 10-year Treasury yield. When investor confidence in the stock market is high, as it has been recently, the demand for bonds drops, causing bond yields—and consequently, mortgage rates—to rise.

Fed Funds Rate Historical Chart

Inflation and Economic Stability

Annual inflation has declined significantly from its peak in mid-2022, dropping to 2.4% as of September 2024. While this allowed the Fed to make policy changes, it’s important to note that economic confidence and global geopolitical issues continue to play roles in how mortgage rates respond. Understanding these trends is essential for those relocating to Dallas, Texas and aiming to time their home purchase.

Core Inflation Chart from the Federal Reserve

Key Housing Market Metrics in Dallas

Cyclical Nature and Price Trends

Historically, the Dallas housing market follows a predictable pattern, with January to June being the strongest period for price gains. The data shows that 2024 had the lowest home price appreciation during the spring market in over a decade. However, the drop in prices during the fall (June to October) was minimal—the third smallest decline in over 10 years. This suggests that despite uncertainty, the market has remained relatively stable. For those looking into living in Dallas, Texas, understanding these patterns can help make strategic buying decisions.

Dallas Fort Worth Historical Housing Market Table Since 2013

Inventory Levels and Buyer Power

Inventory levels in Dallas are at multi-year highs, with October 2024 recording 4.5 months of inventory. While not enough to classify as a buyer’s market (which requires six months of inventory or more), this increase provides buyers with more negotiating power than in recent years. The days on market also reached 39 days in October, nearing levels typical for January, indicating a slowdown in activity. If you’re considering moving to Dallas, Texas, this could mean more opportunities to secure a favorable deal.

Dallas Housing Market Inventory as of October 2024

Median Sales Price Trends

The median sales price for October 2024 was $375,000. Notably, the lows of each year have been rising, showing that the market has found footing at certain price points. This signals that buyers stepping in to purchase homes are doing so at higher price levels than in previous years. For those relocating to Dallas, Texas, this is a crucial insight into long-term market resilience.

Comparative Market Analysis

To better understand the strength of the Dallas housing market, it’s helpful to compare it with other major markets like Austin and Houston. While Austin has experienced more volatility due to rapid growth and subsequent cooling, Dallas has maintained more consistent demand, supported by its diverse economy and strategic location. Houston, influenced heavily by the oil industry, has seen different fluctuations, making Dallas a more balanced choice for relocation.

Closed Sales Statistics

Closed sales in October 2024 were strong, with 8,681 transactions, up from 8,079 in 2023 and 8,566 in 2022. This increase in closed sales is an encouraging sign that activity is building within the market. Living in Dallas, Texas continues to attract interest, as demonstrated by these figures.

Annual 12 Month Rolling Average Dallas Housing Market Price and Closed Sales

New and Pending Listings

New listings for October 2024 were at their highest in four years, showing an increase in available inventory. Pending sales also reached their highest level for October in the past two years, indicating that buyers are actively purchasing homes despite the rise in inventory. If you are considering relocating to Dallas, Texas, this trend highlights the available options and market dynamism.

DFW Housing Monthly Closed - Active - Pending Sales Charts

Economic Indicators to Watch

Housing Permits and Supply Constraints

New construction permits have been declining since May 2024, and as of September 2024, DFW is short over 91,000 permits relative to job growth. This persistent shortage in new housing supply is a major reason why home prices have not dropped significantly despite increased inventory. For potential buyers and those living in Dallas, Texas, this underscores the sustained demand in the market. Additionally, the lack of new permits contributes to a higher reliance on existing home sales, which can keep prices more stable.

DFW New Housing Permits Chart

Demographic Shifts and Job Sector Insights

The DFW area continues to experience population growth fueled by an influx of people from other states seeking better job opportunities and a lower cost of living. The region's economic strength is supported by booming industries such as technology, finance, healthcare, and energy. This growth further contributes to the demand for housing and supports the long-term stability of the market. For anyone considering moving to Dallas, Texas, the job market's health is a significant advantage.

Unemployment and Wage Growth

Unemployment in the Dallas Fort Worth area remains low at 3.9%, and wages have reached an all-time high, with average hourly earnings now over $35. This strong economic backdrop supports continued demand for housing, even as inventory rises. For those moving to Dallas, Texas, these economic strengths can provide reassurance about job opportunities and financial stability.

DFW Unemployment Chart from Federal Reserve

Mortgage Delinquencies and Foreclosures

Mortgage delinquencies (90+ days late) are at multi-year lows, with no signs of a surge in distressed sales. This indicates that the market is not facing an imminent wave of foreclosures that could dramatically shift prices. For those already living in Dallas, Texas, or planning a move, this stability is a positive indicator.

Mortgages More Than 90 Days Late Chart Federal Reserve

Affordability Index and Rent vs. Buy Analysis

While housing prices have risen, wage growth has helped maintain a reasonable affordability index compared to other major U.S. cities. For those debating whether to rent or buy, the market’s current conditions and long-term resilience suggest that buying remains a solid investment in Dallas. Renting may be appealing for short-term flexibility, but buying offers long-term financial benefits, particularly with continued population and job growth.

Days on Market and Buyer Negotiation Power

The days on market for homes in October 2024 was 39 days, which is unusually high for this time of year and closer to January’s typical numbers. Additionally, the percent of original price received by sellers is at its lowest in the past two Octobers, giving buyers more room to negotiate deals than in recent years. This trend can be advantageous for those relocating to Dallas, Texas, seeking to buy at more favorable terms.

DFW Housing Market - Days on Market Chart

What Does This Mean for Buyers and Sellers?

For buyers, increased inventory, longer days on the market, and lower original price percentages mean more options and potential negotiation leverage. October and January are historically good months for buying, as prices often dip to spring levels. For sellers, understanding the cyclical nature of the market can be crucial for timing your sale for maximum gain. If you are considering living in Dallas, Texas, or relocating to the Dallas Fort Worth area, these insights can guide your strategy.

Conclusion

While the Dallas housing market has faced significant challenges, the data suggests stability rather than dramatic shifts. Inventory is up, but demand remains strong, buoyed by economic fundamentals like low unemployment and wage growth. For those considering a move to Dallas or a change in their real estate strategy, staying informed and proactive is key. The Dallas housing market remains resilient, making it an attractive choice for those interested in moving to Dallas, Texas or finding a new home in the region.

For more detailed metrics and updates, visit my website at whymovetodallas.com where I regularly update these indicators. If you’re thinking about relocating to the Dallas Fort Worth area, feel free to reach out. I’m here to help you navigate the local market with confidence.

Watch the Full Video

For a comprehensive analysis, make sure to watch my latest YouTube video on this topic by clicking on the video at the top.

Stay tuned for more insights on the Dallas real estate market!