Home prices in Dallas-Fort Worth were flat last month, and sales fell slightly compared to last August despite big supply increases.
However, recent mortgage rate drops and projected future interest rate cuts could make 2025 an exciting year for the housing market.
A real estate and finance professor, the principal of a housing market research firm, and a real estate agent spoke with The Dallas Morning News about housing trends and what the next year may hold.
“I think people will step off the sidelines and start buying next summer, so we’ll see some better activity compared to summer 2024,” said Sriram Villupuram, a professor of finance and real estate at the University of Texas at Arlington.
The data
This August was not much different than last year — except the region’s supply is way up, according to data released by the Texas A&M Real Estate Research Center, the MetroTex Association of Realtors and the North Texas Real Estate Information Systems.
Active listings hit 29,865 in North Texas, up 45% year over year. Months of housing inventory hit 4 months, the most since October 2012. That figure tracks the time it would take to sell the current supply of homes on the market under the current sales pace.
Despite that, prices and closed sales haven’t changed much.
The median price of a D-FW home did not move from almost $400,000. This figure includes existing single-family homes, condos, townhomes and other similar properties sold on the MLS last month.
The median price of a single-family home was $405,000, no change from last year.
There were 8,170 closed sales in the region, down 4.3% from August 2023. Homes are also staying on the market longer. From first listing to close, houses spend a total of 82 days on the market. That’s 10 days more than last August.
In Dallas County, the median price of a home was just over $359,000, down 1.5%. Sales were flat. Active listings neared 6,500, a nearly 53% increase.
RE/MAX’s National Housing Report showed similar figures for Dallas-Fort Worth. The region ranked third in the nation in home sales, behind Chicago and New York.
Villupuram said it’s a monthslong trend in D-FW. More houses may be on the market, but it’s not the type of supply that buyers want. The homes are likely priced too highly.
“It’s just not moving the median (price) in any meaningful way,” he said.
Todd Luong, an agent with RE/MAX DFW Associates, said lower sales numbers in August could be the result of buyers waiting for interest rates to drop further. Affordability remains a concern.
While buyers are staying on the sidelines, those who have decided to purchase are starting to see some friendlier terms.
“I helped my buyer secure a property in Bent Tree, a popular neighborhood off the tollway. They’re offering below asking price, and the seller has no choice but to take it. Buyers have a lot more bargaining power,” he said.
Interest rates and 2025
Buyers waiting for mortgage rate drops got good news Thursday. The average 30-year mortgage rate was 6.09%, down from 6.20% last week, according to Freddie Mac.
The news came after the Federal Reserve on Wednesday announced a half-point interest rate cut — the first cut since the COVID pandemic.
The Federal Reserve anticipates four more cuts by the end of 2025, the Associated Press reports. Mortgage rates don’t follow moves by the Fed as other factors impact the housing market.
However, Freddie Mac’s Chief Economist Sam Khater said in a statement that the recent drop in mortgage rates is reviving purchase and refinance demand.
“Declining mortgage rates over the last several weeks indicate this cut was mostly baked in, but we expect rates to fall further, sparking more housing activity,” he said.
It won’t all happen overnight.
Luong, Villupuram and Ted Wilson, who oversees housing market research firm Residential Strategies, said this decline coupled with future mortgage rate drops next year will likely spur some activity.
Homeowners who locked in low interest rates years ago but want an upgrade or a bigger home could finally make a move.
Wilson said he hopes the rate cuts will sustain D-FW homebuilders and rev up activity in the existing home market as well. Those who bought homes when rates were higher will begin to refinance.
“In the existing home market … as you head towards 5%, they’re going to go ahead and make that move,” Wilson said. “We could see a lot more inventory come to market. I think it will be interesting to see how that plays out.”
There are caveats, the trio said.
Villupuram said the advantage of lower rates could be “eaten” away next year if the supply of desirable homes doesn’t increase. Home prices, he said, could go up.
Luong pointed to ongoing affordability concerns. Buyers have to come up with the down payment, and home insurance rates have increased dramatically over the past few years.
Wilson expressed concern about D-FW’s employment numbers.
Relocation buyers play a big role in D-FW’s housing market, and Wilson wants to see new D-FW job numbers hit an annual pace of 100,000. As of August, D-FW has added 58,700 jobs annually — roughly half of last year’s pace, according to the Texas Workforce Commission estimates released Friday.
He’s hopeful D-FW will hit the mark in 2025 as rate cuts boost demand and hiring.
“This is a new chapter,” Wilson said. “We’re getting ready to see rates come down. I’m hopeful that rates stimulate the market, but gosh we sure need to get our job growth back up.”
