Home buyers are gaining some leverage but still face challenges in Dallas-Fort Worth as inventory hit near decade highs in June.
Nearly 38,700 homes were for sale in North Texas last month — the most since 2018. Housing inventory is up 24% year over year and 3.1% over May, according to a new study from Zillow.
The housing market is roughly balanced between buyers and sellers in June for the first time since 2019. For the past five years, sellers have had the advantage.
Sellers are also starting to cut asking prices. Nearly 36% of listings had a price cut in June.
D-FW Real Estate News
Listings that sell go under contract in 29 days at the median, 10 days longer than last year. New listings from sellers are about the same as they were a year ago.
“The Dallas-Fort Worth housing market has a record-breaking number of homes for sale, giving buyers a wealth of options to choose from,” said Kara Ng, Zillow’s senior economist. “While neither buyers nor sellers have a clear advantage yet, buyers currently hold the strongest negotiating power recorded in Zillow’s history for the metro — and that power is expected to grow as competition eases through the fall.”
Another home inventory metric in D-FW has hit a 13-year high. Data from Texas A&M University’s Texas Real Estate Center shows the months of housing inventory is just over 4.8 months.
Months of housing inventory tracks roughly how long it would take all the homes on the market to sell at the current pace.
It’s the highest since July 2012.
There were more than 8,900 closed sales in June, up more than 8% from last year.
Shriram Villupuram, a real estate and finance professor at the University of Texas at Arlington, said that buyers do have more choices, but the notion that they hold more negotiating power in the market goes a little too far.
He describes a mostly stalemated housing market.
Most sellers are sitting on low mortgage rates and their holding costs are low. Sellers who don’t need to move immediately could rent out their homes.
Buyers are dealing with higher mortgage rates and economic uncertainties. Single-family rents are softening in the region.
A recent increase in sales should give buyers some hope, he said.
However, Villupuram also highlighted another data point — roughly 18% of homes that went under contract in the Dallas area last month fell through as buyers or sellers walked away, according to Redfin.
“This is not a market where sellers are desperate to sell,” he said. “These are not necessarily all motivated sellers. When you don’t have a motivated seller on the other end, they have a lot of time on their hands. They’re not going to budge by much, but in some parts of the market there are opportunities for buyers.”
Villupuram expects more inventory to pile up if interest rates remain high.
“I think when interest rates would come down, sellers may be more willing to negotiate a sale so that they can also take that money and go buy their next home,” he said.
The shift to a neutral market is significant, but it doesn’t mean it’s an easy market for buyers, Ng said. Affordability remains a concern.
The median price for a home in D-FW was $405,000 in June, roughly flat year over year. The average 30-year mortgage rate inched up slightly to 6.75% as of July 17.
“While negotiating power is more balanced, the affordability crisis remains a high barrier to entry, especially for first-time buyers,” she said. “Until we see a more meaningful improvement in purchasing power, this newfound balance will primarily benefit more well-off buyers.”
However, Ng said affordability is expected to improve as 2025 rolls on.
“Affordability should see modest improvement as well, with home values projected to decline 2.1% throughout 2025,” she said.