D-FW housing outlook for 2024 hinges on lower interest rates – The Dallas Morning News

3 minutes, 7 seconds Read

Editor’s note: This story is part of our Mixed Signals: 2024 Economic Forecast for Texas, featuring stories about labor, inflation, housing, migration, rising utility costs and other factors propelling the North Texas economy.

Lower mortgage rates top the housing sector’s wish list for 2024.


Buy/sell, rent/lease residential &
commercials real estate properties.

The biggest interest rate run-up in more than two decades depressed home sales this year and slammed the brakes on house price increases in North Texas after years of huge gains.

Look Ahead 2024(Michael Hogue/DMN)

With the Federal Reserve signaling a halt to interest rate hikes, housing industry leaders are more optimistic about the year ahead.

“Home sales after two straight years of difficulty will begin to rise next year,” said Lawrence Yun, chief economist with the National Association of Realtors.

Advertisement

Yun is predicting home mortgage rates will decline in 2024, after topping out near 8% this year.

D-FW Real Estate News

Get the latest news from Steve Brown and the business staff.

“I believe average mortgage rates next year will be in the mid-6% range,” he said.

Advertisement

That should boost homebuying and housing affordability in North Texas and around the U.S.

The Realtors’ association is forecasting that the Dallas-Fort Worth area will be one of the country’s top housing markets in 2024, second only to Austin.

“The demand for housing will recover from falling mortgage rates and rising income,” Yun said in a statement. “In addition, housing inventory is expected to rise by around 30% as more sellers begin to list after delaying selling over the past two years.”

Advertisement

Existing home sales in the Dallas-Fort Worth area were down 7% through the first 11 months of 2023 compared with the same period last year. And median sales prices for houses sold by real estate agents dropped 2% year over year.

North Texas homebuilders are hoping that a dip in mortgage rates in 2024 will bring more buyers to their doors.

“If rates drop, we could have a really active market,” said Ted Wilson, principal with Dallas-based housing analyst Residential Strategies. “If they drop below 7%, it will really help.”

Wilson is estimating that local builders will start as many as 48,000 houses in 2023. Through the third quarter, D-FW home starts were down about 14% from the same period last year.

“There is pent-up demand for houses but that only will be unlocked if rates come down lower,” he said. “Affordability is a huge challenge.”

Fueling homebuying in North Texas is continued near-record population gains and strong job growth.

The D-FW area grew by about 170,000 residents last year. And North Texas had added almost 150,000 jobs during the 12 months ending in October.

“As long as people have jobs and income, the demand for housing is still there,” said Jim Gaines, longtime economist with the Texas Real Estate Research Center at Texas A&M University. “Home sales statewide are down a few percentage points — not as much as you’d have thought.

Advertisement

“Prices have been more or less flat,” Gaines said.

And with only about a three-month supply of existing homes listed for sale in North Texas, inventories remain tight.

Gaines is also forecasting more attractive mortgage rates in 2024.

“The market can live with mortgage rates in the 6′s and 7′s,” he said. “If it gets above 8%, it’s a problem. But I don’t see that happening.”

Advertisement
Related Stories

More renovations underway at downtown Dallas’ former Chase Tower

The 55-story former Chase Tower in downtown Dallas is getting another makeover.

S&P 500 wraps up the year with longest sustained rally since 2004

The stock market gauge of large-cap companies climbed 24% in 2023, while the Nasdaq 100 had its best year since 1999.

Brutal Texas weather could lead to another utility and insurance increase in 2024

Home insurance and utility prices are expected to jump again in 2024 and experts are saying Texas’ climate it partly to blame.

This post was originally published on this site

Similar Posts

X
0
    0
    Your Interest
    Your Interest List is emptyReturn to Buying
    ×