More homes are hitting the market in North Texas, pushing the region’s months of housing inventory to their highest levels in more than a decade.
But that’s not the full picture.
Buyers are still snatching up homes at the same pace they were last year. Houses aren’t spending more time on the market. The selling season is slowing down, too.
Experts told The Dallas Morning News that conditions are looking better, but the market is not balanced. Interest rates are high, and affordability remains a concern.
“Supply pressures are easing slightly, but there’s still a long way to go,” said Sriram Villupuram, a finance and real estate professor at the University of Texas at Arlington. “That’s not enough.”
Where’s inventory sitting?
Dallas-Fort Worth had 3.5 months of housing inventory at the end of May — the highest since November 2012, according to data from the Texas Real Estate Research Center at Texas A&M University, North Texas Real Estate Information Services and the MetroTex Association of Realtors.
Roughly six months of inventory is needed for the housing market to be considered balanced between buyers and sellers. That figure tracks the number of months it would take to sell the homes currently on the market.
The data comes from the Multiple Listing Service, a private database of properties for sale through real estate brokers.
“It’s hard for me to say we’re in a buyer’s market,” said Justin Landon, MetroTex CEO. “We’re still in a seller’s market in many ways, and there are more buyers than there are homes for sale.”
In May, there were more than 25,900 active listings in the Dallas-Fort Worth area, a 51.4% increase over the same period last year.
This marks the third consecutive month that active listings have jumped more than 30% over the previous year. Listings were up nearly 46% in April and almost 36% in March compared with 2023.
The last time North Texas had this many active MLS listings was September 2019.
Listings jumped in all counties in the D-FW. Collin County saw its active listings top 4,100, a nearly 77% increase over last May. Dallas County had 5,567 active listings, a 64.2% increase.
Median prices and the number of closed sales will be key figures to watch in the coming months. It’s unclear how the influx of supply will affect both key metrics.
The median price of a D-FW home in May was $410,000, a 1.2% increase over last year. In Dallas County, the median price was $387,000, up 4.6% from a year ago.
Roughly 9,450 sales closed in North Texas, unchanged from May 2023. Sales are a lagging indicator, reflecting what was on the market 60 to 90 days earlier.
May tends to be a high point in the selling season. Those looking to sell before the start of a school year have likely already listed their home, Villupuram said.
Even as the supply increases, buyers still snatch houses up. From start to final close, homes are on the market for an average of 76 days in D-FW, one less day than in May 2023.
What else will affect the market?
Several larger factors outside of supply affects the market.
Among the most important is interest rates. The average 30-year mortgage rate for the week ending June 13 in the United States was 6.95%. Rates topped 7% in April and May.
The Federal Reserve did not change its key interest rate last week and scaled back its forecast from three rate cuts to only one amid sticky inflation.
Other costs associated with homeownership have increased.
Texas home insurance rates have soared 54.5% from 2019 through March 2024, according to an analysis by online lending platform LendingTree. Arizona, Nebraska, Illinois and Utah saw even larger cumulative increases during that time.
“Affordability is still a challenge,” Landon said. “Demand is remaining fairly constant. Supply is coming up a little bit because sellers are getting off the fences. And now the question is will demand pick up to respond? We’ll have to want to wait and see what happens with rates and all the rest.”
