Mortgage rates curb Dallas-area home sales
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Home sales were down nearly 14% year over year in the Dallas area, per RE/MAX's newly released February report.
Why it matters: In 2022, potential buyers were desperate for more inventory. Now homes are hitting the market, but people can't afford them.
What's happening: Rates for a 30-year loan were at 6.09% in early February and shot up to 6.65% by the end of the month, per Freddie Mac.
Zoom in: Locally, home sales increased by 31% between January and February — but active inventory decreased by 10%, per RE/MAX.
- The Dallas area had almost 217% more active inventory this February compared with February 2022.
- Land that was barren for a long time in cities like Lewisville, Frisco and The Colony is starting to be built out, creating more options for homebuyers.
Yes, but: Mortgage rates remain high and the cost of new builds continues to increase, making it more difficult for first-time homebuyers to enter the market.
Zoom out: Because there's less competition right now, buyers don't have to front as much cash as they did a year ago, Axios' Emily Peck reports.
- The typical U.S. homebuyer made a down payment of $42,000 in January, the lowest amount in almost two years, per a Redfin report.
Between the lines: Buyers who can afford the current mortgage rates have more power.
- They have more options than a year ago, can take their time searching and can make offers that aren't wildly above list price.
What's next: Mortgage rates dropped nearly a quarter point last month, which means buyer activity may pick back up.