The data shows strong variations in the fall in average home prices since their spring peaks in cities in North Texas. While these home prices rise, so do rents, and if you buy a home with a fixed-rate mortgage, your monthly payment will remain the same, while the rent surrounding it will continue to increase. For example, CoreLogic classified the Lake Havasu City-Kingman and Prescott areas of Arizona, together with Bridgeport (Connecticut), as areas with a very high risk of suffering a price drop in the next 12 months. And while the rate at which home prices rise will slow down, that's likely because fewer people can afford to buy in a more expensive market.
The Texas housing market and house prices, in general, are evaluated at the end of each year by the Texas Association of Realtors and other market experts. For it to really decline, there would have to be some changes on the supply side: an influx of newly built homes or a lot of people moving and not just to other single-family homes. Price reductions in general have increased in the Dallas market, but Dallas continued to be a point of attraction for buyers in other areas, according to research conducted over the past decade, due to large employment opportunities in the metropolitan area. Until this demand among potential buyers increases again, as it has in recent years, existing homes that are sold will remain on the market for longer and could even lower prices to the asking price to increase the affordability of purchase.
Once interest rates stabilize and buyers can make higher monthly mortgage payments, home prices will rise again. Under pressure from rapidly rising home prices, higher mortgage rates, and higher monthly mortgage payments, homebuyers wonder when the market will experience some relief and home prices will begin to fall. The limited supply of homes means that the markets are incredibly competitive, and while that trend could decrease as demand decreases, they will still be seller's markets. A research economist from Forbes expects home prices to face a 20% drop in some regional markets, where the construction of new homes will boost supply.
Builders will be forced to aggressively reduce prices in the coming months in areas such as Dallas, Austin and Texas. The supply of available housing has declined, due to fewer people choosing to move from existing homes and the insufficient construction of new homes over the past decade. In January, home prices rose rapidly, but at least mortgage rates were close to historic lows, offering some comfort to those trying to afford a home. Mortgage rates have reduced the purchasing power of buyers of average-priced homes by approximately 14%, Losey says.
In DFW overall, home prices rose year after year in October, but fell for the third consecutive month.