DALLAS - The Dallas real estate market is currently a seller's market. While the lack of inventory makes buying a home difficult, new developments are expected to increase the supply of homes for sale. As a result, home prices should continue to rise but at a slower pace in the coming months. Home price growth is already slowing in many metro areas, including Dallas.
Renting is more cost-effective than buying in Dallas
Buying a home in Dallas might not be the best option if you are a first-time homebuyer. Not only does it require a substantial investment, but it can also cost you a significant amount of money in property taxes. In addition to these costs, homeowners must also factor in repairs and renovations. If your budget is limited, renting may be a good option. This way, you can plan your finances better, and unexpected maintenance issues won't catch you off guard.
The costs of homeownership are often the deciding factor when considering whether or not to purchase a home in Dallas. Depending on your current financial situation and employment status, purchasing a home can be a good option. However, it is vital to consider how much money you have saved for a down payment.
Although it might be tempting to buy a property in Dallas, renting is the smarter option in many cases. The city's growing population has resulted in a higher demand for rental properties than homes. This is partly due to the influx of young people who prefer renting over buying. During the past year, demand for rental units in Dallas has increased by 14 percent.
Home prices are appreciating but at a decreasing rate
According to the latest Fannie Mae report, home prices will continue to rise but will decelerate in 2023. The reason is rising mortgage rates and a slowing economy. As a result, demand for homes will decelerate. One economist even predicts a decline in some hot markets.
Although the U.S. housing market is expected to slow a bit in the years ahead, it's still hot right now, according to GOBankingRates' forecast. In February, the median price for existing homes in Dallas was $350,300, a 15.3% increase over February 2013. In 2023, home prices are projected to drop slightly, but they are expected to stay above $350,000.
Despite this forecast, investors should be prepared to act now if they're looking to buy a home in the coming years. While several factors should be considered before buying a home, you should always consider your current financial situation and whether the rising mortgage rates will affect your ability to make payments.
Demand for rental accommodation is increasing year-over-year in Dallas
The demand for rental accommodation in the Dallas real estate market is growing rapidly. It is one of the few cities where renting is more affordable than buying, and the demand for rental properties has increased 14 percent yearly. One of the main reasons for the growth of rental markets in Dallas is the influx of young people opting for rentals over owning a home.
The median rent for a three-bedroom home in Dallas is $2,295 monthly. According to the US Bureau of Labor Statistics (BLS), the rental market has grown four percent yearly. Dallas has more than 1.3 million residents in the city alone. Compared to urban coastal cities, the cost of living in Dallas is fifty percent less.
Rental rates have increased faster than home values in the past year. Considering the low supply of rental properties, this may be a perfect storm for local investors.
Texas home prices are likely to attract a large number of buyers in 2023
According to the incoming president of the Greater Houston Builders Association, Mike Dishberger, the state's housing market is experiencing a spike in demand for new homes. Rising mortgage rates are also adding to the pressure on homebuyers, and the rising prices are causing them to reconsider making a purchase. Last April, the average price of a single-family house in Texas reached nearly $350,000. Over the last year, the average Texas home price increased 12.4%. Since January 2020, it has jumped over 21%.
In addition to the booming housing market in Texas, the state's low-cost housing is also a plus. Comparable home prices in Texas are still cheap compared to Seattle, New York, and California. Because of the low cost of housing in Texas, rich Americans will continue to flock to this state, which will provide some stability for the housing market. However, with the rising cost of living, rents and taxes will likely increase. Buying now can help you lock in lower mortgage rates and lower rents.
While the average Texas home price has flattened out over the past three months, it is expected to hit a new high of $360,000 in April 2023. This will be a record high for the state. Experts predict that Texas home prices will continue to rise over the next several years, but at a slower pace than the last two years.