DFW Housing Market Update: Lower Prices Ignite Frenzy of New Construction Home Sales

DFW Housing Market Update Lower Prices Ignite Frenzy of New Construction Home Sales (1)
In this DFW housing market update, we’ll cover a lot of ground. From interest rates to the new construction boom, status of existing home sales, and our advice for buyers and sellers.

In this market update, we’ll cover a lot of ground. We’ll dig into the recent rate cuts by the fed and impact of that, plus what we expect to see in the future regarding interest rates.

Then, we’ll dive into the home buying frenzy of new construction homes that appeared in August spurred on by price drops. And we’ll discuss the continuing inactivity in existing home sales as those prices remain flat and we see more of the same.

Finally, we’ll break down all the numbers for you, county-by-county across the metroplex so you know exactly what’s happening in your market right now and why.

Lastly, we’ll offer you the best advice we’ve got if you’re a current home buyer or sellers on how you can best capitalize on this real estate market we’re in right now.

So, let’s dive in!

Impact of Recent Interest Rate Cut on Mortgage Rates

Short-Term Outlook

The recent interest rate cut is unlikely to significantly affect mortgage rates in the immediate future. This is primarily because the market had already factored in the anticipated rate decision, causing mortgage rates to adjust even before the official announcement of a rate cut.

Interest Rate cut Unlikely to Affect Mortgage Rates in Near Future

Current Mortgage Rate Landscape

Bankrate reports the average interest rate for a 30-year fixed mortgage is at 6.21%. This is a substantial decrease of over one percentage point since May, with an even more significant drop from the peak rates last October.

Relationship with Treasury Bonds

Mortgage rates typically mirror the yield on 10-year Treasury bonds. Interestingly, despite the Federal Reserve’s rate cut on Wednesday, the 10-year Treasury bond yield saw a slight increase, contradicting the expected downward trend.

Future Projections

While the immediate impact may be minimal, experts anticipate a gradual decline in mortgage rates throughout the remainder of 2024 and into 2025.

  • End of 2024: Federal Open Market Committee (FOMC) projections indicate interest rates will decrease by nearly half a percentage point from their current range by the end of 2024.
  • 2025: A further percentage point drop is expected over the course of 2025.
 

These projections suggest that mortgage rates could indeed see a downward trend as investors become more confident in the sustainability of falling interest rates.

New Construction Home Sales Heat Up While Resale Remains Stagnant

The Dallas-Fort Worth metroplex has experienced a notable decline in median property prices over the past year. The decrease ranges from a modest 2% in Rockwall County to a more substantial 6.5% drop in Dallas County, reflecting a varied but consistent downward trend across the region.

Prices are falling across the region

As we’ve been telling you in these market updates, prices coming down is ultimately the biggest factor in getting homes sold. This month is an even bigger confirmation of what we’ve been advising our sellers regarding what to do in this market.

And we see it again this month, especially in new construction. New construction prices in Kaufman County are down 10.9%, for instance, and this month, pending sales of new construction homes in Kaufman County are now up a whopping 90% year over year.

In Dallas County, the median price of new construction homes is down 6.8% and pending sales of new homes are up 78% year over year. In Rockwall County, new construction home prices fell 9.4% and pending sales are up 53%.

We see the uptick in activity more so in the new construction realm because for them, it’s a business transaction. They need to sell homes and move units, so they make the business decision to lower prices – then, they see activity and buyers coming to them.

But when you look at the resale market, current homeowners have been much slower to lower prices. As a result, homes are sitting longer, and transactions are stagnant. For example, in Dallas County, median prices on resale homes are flat year over year. Then, pending sales are down -.01%. This is the same across the board. Prices are mostly flat across the metroplex for resale, and so are home sales and transactions.

So, looking at the data, if you’re a seller, this tells you that even dropping your price by 10-15% could create so much more activity on your listing. And the good news is that when you turn around to go buy a home after your sale, you’ll make that up on the buy-side.

Plus, many sellers still have an enormous amount of equity in their homes – even if you do come down on the price by 10%. On average, most people have seen a gain of 40 to 50% on their home values just since 2020.

If you bought your home for $335,000 in 2020, that same home is probably worth at least $480,000 today.

Homes Still Retain a Great Amount of Equity in DFW

If you’re curious about your home’s exact value, just reach out or click here

We can provide you with a free home valuation anytime – and it’s no obligation and completely complimentary.

The Breakdown: Latest Key Housing Numbers and Statistics Across Dallas-Fort Worth

Median Sales Prices

Median Sales Price for All Housing Types

  • Dallas County – $360,000, down 1.4% year-over-year
  • Kaufman County – $310,000, down 7.4% year-over-year
  • Collin County – $500,000, down 2.9% year-over-year
  • Rockwall County – $418,500, down 4.8% year-over-year
  • Tarrant County – $345,000, down 1.4% year-over-year
  • Denton County – $484,000, up 5.2% year-over-year
Median Sales Price for All Construction

Median Sales Price for New Construction Homes

  • Dallas County – $390,000, down 6.8% year-over-year
  • Kaufman County – $315,393, down 9.8% year-over-year
  • Collin County – $443,000, down 7.5% year-over-year
  • Rockwall County – $385,000, down 9.4% year-over-year
  • Tarrant County – $372,990, up .8% year-over-year
  • Denton County – $458,413, down 3.8% year-over-year

Median Sales Price for Existing, Resale Homes

  • Dallas County – $350,000, flat – change of 0% year-over-year
  • Kaufman County – $300,000, down 7.1% year-over-year
  • Collin County – $531,500, up 1.2% year-over-year
  • Rockwall County – $439,000, down 2.2% year-over-year
  • Tarrant County – $340,000, down 1.4% year-over-year
  • Denton County – $488,000, up 8.4% year-over-year

You can see here that on average, new construction prices are much lower than resale prices across the board, with two exceptions: Kaufman County and Tarrant County. However, in Tarrant County, prices are down 1.4% for resale and up .8% for new construction – so you’d expect to see that. Then in Kaufman County, resale home prices have seen bigger drops than in other areas of the metroplex.

New construction prices are lower than resale prices

Cost Difference Between New Construction & Resale Homes in Today's Market

Here’s the difference between new construction prices and existing homes on the market in DFW, county by county:

  • Dallas County – Resale Prices are $40,000 more or 11.5% higher than new construction homes.
  • Kaufman County – Resale Prices are $15,000 less or 5% lower than New Construction Homes
  • Collin County – Resale Prices are $88,500 or 20% more than New Construction Homes
  • Rockwall County – Resale Prices are $46,000 or 15% more than New Construction
  • Tarrant County – Resale Prices are $32,000 or 9% more than New Construction
  • Denton County – Resale Prices are $30,000 or 7% more than New Construction

Average Days on Market

  • Dallas County – 41, up 46.4% year-over-year
  • Kaufman County – 64, up 14.3% year-over-year
  • Collin County – 49, up 44.1% year-over-year
  • Rockwall County – 58, down 15.9% year-over-year
  • Tarrant County – 41, up 20.6% year-over-year
  • Denton County – 44, up 12.8% year-over-year
Average Days on Market

Transaction Activity: Pending Sales Across the Metroplex

Pending Sales for All Housing Types

  • Dallas County – 1,769, up 6.1% year-over-year
  • Kaufman County – 355, up 35.5% year-over-year
  • Collin County – 1,360, up 5.9% year-over-year
  • Rockwall County – 216, up 14.9% year-over-year
  • Tarrant County – 1,779, down 4.8% year-over-year
  • Denton County – 1,111, down 11% year-over-year *Remember, in Denton County the median sales price was the only one up year-over-year. Where prices are up, sales are down.

Pending Sales for New Construction Homes Up 50 to 90% in Some Areas

  • Dallas County – 235, up 78% year-over-year
  • Kaufman County – 188, up 89.9% year-over-year
  • Collin County – 449, up 11.4% year-over-year
  • Rockwall County – 90, up 52.5% year-over-year
  • Tarrant County – 317, up 9.7% year-over-year
  • Denton County – 337, up 2.4% year-over-year
Pending New Construction Sales

Pending Sales for Existing Homes Remains Stagnant, Along with the Prices

  • Dallas County – 1,532, down .1% year-over-year
  • Kaufman County – 166, up 1.8% year-over-year
  • Collin County – 911, up 3.4% year-over-year
  • Rockwall County – 126, down 2.3% year-over-year
  • Tarrant County – 1,461, down 7.5% year-over-year
  • Denton County – 773, down 15.9% year-over-year

Final Thoughts on the DFW Real Estate Market: Advice to Buyers and Sellers

So, you can see that pending home sales for resale homes are down to flat across the board compared to new construction home sales that are up anywhere from 10 to 100% year-over-year.

For the market to resume normal activity, prices are going to have to come down by at least 10% for resale homes before we see the type of activity we’re now starting to see in new construction. Except for Kaufman County, resale home prices have remained flat and thus home sales for resale homes are flat.

Our advice to buyers is the same as last month: Continue to make those offers. Sellers ARE getting fatigued.

Make Offers Sellers are Getting Fatigued

As you can see, transactions are low in the resale market so sellers are fatigued. With the advice of your real estate agent, make those offers under-asking by 10-15% or more. See what you can get. Or, new construction is a good option right now, as their prices as shown above are on average, around 10% less than an existing home.

For sellers, it’s like we’ve been saying. If you price it right, it’s going to sale. If you’re willing to come down by 10 to 15%, you’ll see the buyers and market come your way.

Share the Post:

Related Posts

Dallas-Fort Worth Real Estate Market Update

Affordability Gap Drives Explosion of Housing Inventory in DFW

The Dallas-Fort Worth housing market is experiencing a “hyper-supply” phase with an explosion of homes for sale, driven by an affordability gap. Despite strong demand and job growth in the area, many homes are sitting on the market due to high prices, with experts suggesting that even small price corrections of 5-15% could significantly increase sales and draw down inventory. This market situation presents opportunities for buyers to make offers below asking price, while sellers may need to adjust their expectations to see more activity.

Read More

How Can We Help You Today?

Have an M&D Real Estate Team Member Reach Out: