Mortgage rates are skyrocketing. Will DFW Home Prices Go Down?

Current 30-year mortgage rates are well above 6%, double since January 2022.

FORT WORTH, Texas — As she unlocked the door to her newly purchased home in Fort Worth, Carolyn Blackman rejoiced.

“I’m excited about it,” Blackman said.

She sees the light after experiencing the turbulence of the real estate market. The school counselor told the WFAA that she was repeatedly outbid when she tried to buy a newly built house.

“You have all your hopes and desires, and then all of a sudden you get the call you didn’t get,” Blackman said. “Your dreams are collapsing.”

Bidding wars combined with rising mortgage rates aimed at fighting inflation have forced her to pivot on her home-buying journey.

“It’s scary,” Blackman said. “I knew I had to buy a house because I don’t believe my sons, who have grown up and live in apartments, will be able to get a house next year.”

With the help of his realtor, Colleen Love, Blackman was able to secure a home in DFW’s hot market.

Love said flexibility is needed in today’s market.

“We have to pivot and change everything. Maybe it’s the location, now you find consumers driving further for a house, choosing a one-story home instead of two,” Love said.

Data from the National Association of Realtors shows that the average 30-year fixed mortgage rate has doubled in less than six months.

In January 2022, it lingered at around 3%. Today they are well above 6%, according to the NAR.

Now that mortgage rates are higher, home ownership is becoming more difficult for buyers, especially first-time home buyers, according to InTouch Credit Union President and CEO Kent Lugrand.

“The biggest impact is that they will more than likely have to cut their budget or rethink what they can afford,” Lugrand said.

According to Lawrence Yun, chief economist for the National Association of Realtors, on a $300,000 mortgage, the monthly payment has gone from $1,265 in December to $1,800 today.

“It is painful and therefore will reduce the pool of buyers,” Yun said in an online blog for NAR.

Love said this year she lost three clients whose price was out of the market when they tried to buy newly built homes from DFW. She is determined to make the dream of buying a home possible for people navigating today’s market.

“It saddens me for the average first-time buyer, because a lot of people are going to be shut out of the market and won’t be able to live the American Dream,” Love said.

While mortgage rate hikes are aimed at lowering home prices, Lugrand believes home values ​​in DFW will remain strong.

“House prices will drop, fall. I don’t think they will drop dramatically, due to the demand for housing in this market,” Lugrand said.

More than two years later, the DFW housing market still has a lot on their toes.

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