Housing Market Has Heated Up As Mortgage Rates Have Cooled
Early in the year home buys faltered, but now they’ve recovered.
The map of Dallas-area home sales is less in the red these days. That’s because lower mortgage rates have sent more buyers into the local housing market during the last few months.
While more than a dozen local residential districts have had fewer home purchases this year, many Dallas-area neighborhoods are seeing a rise in purchases as home loan interest rates have fallen.
“We are not back to where we were, but once we got past the first quarter, everyone saw the sky wasn’t falling,” said Cathy Mitchell, president of the MetroTex Association of Realtors. “The consumer confidence level is getting back to where it needs to be, and lower interest rates have certainly helped.”
Almost a dozen areas have had double-digit percentage home sales gains so far this year compared with the same period in 2018, according to data from the Real Estate Center at Texas A&M University and North Texas Real Estate Information Systems.
Total sales in the Dallas area are up 2% from last year’s record market. Some of the biggest sales increases during the first nine months of 2019 have been in fast-growing suburban markets, including Prosper (up 24% year-over-year), Melissa (18%) and Allen (15%). Some local markets that previously had substantial increases in home buys have cooled off this year, including Plano (-6%), the Park Cities (-5%) and North Dallas (-5%).
Home sales in North Texas and around the country sputtered late last year and in early 2019 when the cost of financing a house rose to near 5%. Likewise, when mortgage rates retreated this summer to near the 3.5% mark, buyers came back to the market. “We really do have a price-sensitive market,” said Paige Shipp of housing analyst MetroStudy Inc. Shipp said that when mortgage rates rose, many buyers headed to the sidelines. “We have a whole generation of buyers who were trained to think 3.5% to 4% is normal for mortgage rates,” she said. “They think now is a good time to buy because this may change.”
Along with the rebound in home sales in many markets, home appreciation has been more robust. Some of the greatest price increases this year have been in areas with the most affordable houses, including Southeast Dallas (up 12%), Duncanville (up 11%) and Southern Dallas (10%)...
