The 2019 housing market brought us low mortgage rates, high demand, and limited supply throughout the nation—this is especially true when it comes to starter homes. So, what can we expect in 2020 for the Dallas housing market? Will mortgage rates continue to decrease? Will demand continue to rise? What will home prices be like?
According to Forbes.com, mortgage rates are at 3.75%. That’s nearly a 1% difference compared to last year, and in the coming year, it’s possible that rates could continue to go even lower. Throughout 2020, we should see interest rates sitting between 3.7%-3.9%. Low interest rates mean two things, the opportunity to refinance and more buyers entering the market. For buyers looking to enter the market, low interest rates allow more home to be purchased within the same monthly budget.
It is predicted that home prices will continue to rise. Over the past year, home prices have gone up 8.1% in Dallas, and it is predicted that they will continue to rise another 4.5% in 2020. This is slightly lower than what the national average has predicted. The property data firm CoreLogic predicts home prices should rise by approximately 5.6% next year.
Dallas Housing Market
Compared to other major housing markets, the Dallas real estate market is in great shape. The Home Buying Institute shows that the Dallas market has more homes for sale, making it a great time to buy. Between starter homes and new construction, 2020 is shaping up to be a great time to purchase. The increase in supply means that Dallas home buyers will have plenty of opportunities to find their perfect home within their price range.
Although the median “days on market” have increased over the past few years, the Dallas real estate market is still active and will continue to stay active into 2020. The latest numbers in the North Texas MLS indicate that the median days on market was 32 for the month of November. That’s only a slight increase from November 2018, which was 30 and November 2017, which was 24.
While home prices have continued to rise, allowing sellers to enjoy more equity in their home, the rise in days on market, give buyers more room for negotiations.
First Time Home Buyers in Dallas
While we’ve seen an increase in new construction supply and many homeowners moving up from their starter home, that’s still leaving first time home buyers in short supply. George Ratiu, senior economist for Realtor.com, told MetroTex Association of Realtors that homes under $200,000 have seen the steepest decline of inventory on the market.
So, what does this mean for those looking to enter the market for the first time?
You need to have a good amount of money saved up for your downpayment and be patient. Even with low downpayment options, unlike move-up buyers, you don’t have the opportunity to use equity from your current home to supplement. Take your time searching, stay within your budget, and ask lots of questions.
Population & Job Growth in Dallas, Texas
In the last two years, the Dallas-Fort Worth Metroplex has received more than 660 new companies from California. With the favorable tax structure and low housing costs, DFW has been a perfect spot for companies looking to relocate. The DFW Metroplex currently leads the state when it comes to job growth. Most recently, Charles Schwab announced its $26 billion merger with TD Ameritrade and is relocating its home office from San Francisco to North Texas.
With more jobs continuing to relocate to DFW, the area is continuing to see a large population increase, which will continue through 2020. This will bring a higher demand for more housing units, affecting both renters and buyers alike.
Between the population growth and a strong job market, new residents will be attracted to the area, increasing the demand for housing and allowing local buyers the financial opportunity to make a purchase within their monthly budget.