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A daily look at the most significant and interesting stories affecting Dallas. Written by Michael Mooney and Tasha Tsiperas.

Axios Dallas Thought Bubble

Axios Dallas

Data: Moody's Analytics; Table: Kavya Beheraj/Axios

In the fourth quarter of 2022, the average asking rent in Dallas was $1,545, up 11.5% from a year earlier, per economic research firm Moody's Analytics.

Why it matters: Affordability concerns are starting to weigh down the booming rental market.

What's happening: Many would-be home buyers chose to rent longer last year, sustaining apartment demand, economists at Moody's Analytics say. But folks are hitting their spending limit.

For the first time in more than two decades, households have to spend 30% of their income on average rents, according to a new report.

Year-over-year rent growth slowed in the second half of the year across the board, "and we expect further deceleration as new supply makes it to market at the same time the labor market softens," Moody's Analytics senior economist Lu Chen tells Axios.

Zoom out: Rents are already falling in cities that were near the epicenter of the pandemic home-price boom, Axios' Matt Phillips reports, citing Realtor.com data.

What we're watching: New apartment construction. The expected surge in supply could help bring down prices.

Yes, but: Experts say most cities will "remain undersupplied with the kind of affordable units that see the highest demand," per the Wall Street Journal.

Dallas rents are still high, for now

In the fourth quarter of 2022, the average asking rent up 11.5% from a year earlier.

Housing

In the fourth quarter of 2022, the average asking rent in Dallas was $1,545, up 11.5% from a year earlier, per economic research firm Moody&#x27;s Analytics.Why it matters: Affordability concerns are starting to weigh down the booming rental market.

News

Real Estate

Data: Freddie Mac; Chart: Madison Dong/Axios Visuals

The Dallas-Fort Worth real estate market is still leveling off, according to the latest data from Redfin/MLS.

Why it matters: After two-plus years of plummeting inventory and sky-high home prices, metro-area buyers have waited a long time for a little relief.

What's happening: Mortgage rates started to surge in May and have since passed 7%, squeezing homebuyer budgets.

By the numbers: Inventory is up 23% and pending sales are down 12% since May.

Median home sales prices fell from $464,000 to $420,000 from May to September.

Sellers are increasingly dropping their asking price. In September, 45% of listings had price cuts, up from 20.5% in May.

Meanwhile, a shrinking share of homes sold above list price. Nearly 27% of homes sold above list price in September, down from 71.5% in May.

Homes are now sitting on the market for more than twice as long. In May, homes sold in 14 days on average, compared with 32 days in September.

Yes, but: Monthly mortgage payments are significantly more expensive than they were a year ago.

The bottom line: North Texas' market is calmer, but buying a home right now isn't necessarily cheaper. 

Homebuying in Dallas is finally easier, but not cheaper

Metro-area buyers have waited a long time for a little relief.

The Dallas-Fort Worth real estate market is still leveling off, according to the <a class="gtmContentClick" data-vars-link-text="latest data" data-vars-click-url="https://www.redfin.com/news/data-center/" data-vars-item="in_content_link" href="https://www.redfin.com/news/data-center/" target="_blank">latest data</a> from Redfin/MLS.Why it matters: After two-plus years of plummeting inventory and sky-high home prices, metro-area buyers have waited a long time for a little relief.

Data: U.S. Census American Community Survey; Chart: Jacque Schrag/Axios

The pandemic shaved a minute and change from your drive to work.

What will you do with all your extra time?

What's happening: The average one-way commute in Dallas-Fort Worth was 1.3 minutes shorter in 2021 compared to 2019, per the latest U.S. Census data.

Why it matters: More people working from home and fewer commuting by car has reshaped the traditional back-and-forth.

More than 16% of Texans worked remotely in 2021, up from nearly 6% in 2019, according to the data.

Between the lines: Traffic congestion is down about 27% across major U.S. cities' downtowns compared to pre-pandemic levels, reports Axios' Alex Fitzpatrick.

Nationwide, the average one-way trip to work was two minutes shorter than in 2019, per the Census data.

What we're watching: For anyone who does go back in, flexible work arrangements make it easier to avoid rush hour and cut back on some of the stress around commuting, Adam Kamins, a senior director at research firm Moody's Analytics, tells Axios.

Go deeper: The number of people working remotely tripled during COVID

Dallas commutes get a little bit shorter

The pandemic shaved a minute and change from your drive to work.<ul><li>What will you do with all your extra time?</li></ul>

Experts predict home prices will drop slightly in Dallas-Fort Worth in 2023 and flatten out over the next few years as part of a correction in the real estate market.  Here's what they're saying.

1. The market is correcting, not crashing.

Higher interest rates are the main driver of the recent slowdown in the real estate market, says Adam Perdue, an economist with the Texas Real Estate Research Center at Texas A&M University.

"But it's also a little bit of a return to seasonality," Perdue tells Axios.

2. The year will get off to a slow start.

In general, the market will be slower than in the first half of 2022, predicts Taylor Walcik, president of the MetroTex Association of Realtors.

"Consumers are more mindful of the economy, stock market, and looming recession fears and are not as motivated to make big financial decisions," Walcik tells Axios.

Yes, but: "There will always be people that absolutely must buy or sell homes, and that is what will be making up most of the housing market in 2023," Walcik says.

Drastic falls are unexpected, Perdue says.

"Over the next few years, we definitely are going to see a flattening in the rate of price increases on a year-over-year basis," Perdue says.

4. Interest rates will still pose challenges.

Until inflation gets under control, "we can expect to have relatively higher rates than we've gotten used to," Perdue predicts.

That means buyers may find themselves with higher payments than they were expecting even as prices level off, Perdue says.

5. Opportunities will arise for buyers and sellers alike.

Buyers will reap the benefits of increased inventory and a more equitable process, while sellers will continue to see an increase in their equity as values keep appreciating through 2023, MetroTex officer Ashley Gentry tells Axios.

Experts say home price growth will flatten in Dallas-Fort Worth

Higher interest rates are the main driver of the recent slowdown in the real estate market.

Illustration of the year 2022, with a keyhole for a zero, which zooms in so you can see through the keyhole to the year 2023.

Experts predict home prices will drop slightly in Dallas-Fort Worth in 2023 and flatten out over the next few years as part of a correction in the real estate market. Here&#x27;s what they&#x27;re saying.<h5>1. The market is correcting, not crashing.</h5>

Data: Point2Homes; Map: Tory Lysik/Axios Visuals

Dallas renters earned 68% of the income they would need to afford a starter home in October, according to an analysis by real estate website Point2Homes.

Researchers considered "starter homes" properties valued in the lower third of available homes for sale.

Why it matters: Higher mortgage rates and housing costs are keeping homeownership out of reach for many first-time buyers.

By the numbers: Renters in Dallas earned an average household income of $45,047, while the income needed to cover a mortgage was $66,243, according to the study.

In September, a typical Dallas starter home cost $221,140, the study found, analyzing Zillow data.

Zoom out: Following October's interest rate hike, renter households in 15 of the 50 largest U.S. cities made less than half the income needed to buy one of the cheapest homes in town, per the analysis.

The big picture: Across the U.S., the share of first-time homebuyers has shrunk to a record low, according to the National Association of Realtors. 

First-time buyers made up 26% of all buyers in 2022, down from 34% last year, the group found.

What we're watching: Dallas-Fort Worth home values would have to fall 38% to return to historical affordability norms, per a recent Zillow report.

Go deeper: 3 reasons it's getting harder for renters to buy

Dallas renters can't afford starter homes

Higher mortgage rates and housing costs are keeping homeownership out of reach from many first-time buyers.

Real estate

Dallas renters earned 68% of the income they would need to afford a starter home in October, according to an <a class="gtmContentClick" data-vars-link-text="analysis" data-vars-click-url="https://www.point2homes.com/news/research/starter-homes-where-to-find-them-entry-level-house-myth.html" data-vars-item="in_content_link" href="https://www.point2homes.com/news/research/starter-homes-where-to-find-them-entry-level-house-myth.html" target="_blank">analysis</a> by real estate website Point2Homes.<ul><li>Researchers considered &quot;starter homes&quot; properties valued in the lower third of available homes for sale.</li></ul>

Sami Sparber

Featured stories

Dallas rents are still high, for now

Experts say home price growth will flatten in Dallas-Fort Worth

Dallas renters can't afford starter homes

Homebuying in Dallas is finally easier, but not cheaper

Dallas commutes get a little bit shorter