DALLAS — This story originally appeared in the Dallas Business Journal, a WFAA news partner.
Dallas-Fort Worth home sales broke a new record in October, falling 27% from the same month a year ago as higher mortgage rates continue to pour cold water on the housing market.
A total of 6,921 homes were sold across DFW in October compared to 9,481 in October 2021, according to the latest Re/Max National Housing Report, representing a decrease of 27%. The drop was the largest year-over-year decrease recorded by Re/Max (NYSE: RMAX) this year.
October was the third straight month of declining home sales across DFW, and the percentages of the drops are growing.
The 6,921 home sales in October was down 14.7% from the 8,111 sold in September. The September home sales were down 11.7% from the 9,182 sold in August.
Home prices are up year-over-year but down for the third straight month.
The median DFW home price in October was $394,900, up 12.3% from October 2021.
But the $394,900 last month was down from the $399,000 median home price in September and the $405,000 median in August, according to the Re/Max report.
Todd Luong, an agent at Re/Max DFW Associates, said more buyers are pausing their search due to higher mortgage rates.
"Many of my buyer clients are waiting right now instead of buying, Luong said. “Because of the higher interest rates, they cannot afford the hundreds of extra dollars they would have to pay each month. The longer they wait, the more leverage they will have with sellers because homes are sitting on the market longer and inventory is slowly increasing, especially as we head into the holiday season.”
Mortgage rates stand at their highest level in more than 20 years. Average 30-year fixed-rate mortgages are now at roughly 7% — more than double their 3% average at the end of last year.
Luong’s clients are postponing purchases because they don't see much risk of significant price increases anytime soon, he said.
Listings in the office Luong works in are getting 1.4 showings per week on average, he said. At this time last year, listings were getting about 2.2 showings per week. It’s also taking more showings before a listing sells, he said.
“It currently takes about 18 showings before one of our listings will sell,” Luong said. “If you do the math there, you will quickly see that the days of sellers getting 20-plus offers on the first weekend are long gone now.”
The supply of housing inventory reached its highest level for the year at 2.7 months supply in October — a 187% increase over last October. While that’s an improvement from the last year, a roughly six-month supply of inventory is considered a balanced market.
“Some agents here in Dallas still say it is a seller's market in certain neighborhoods and cities because of the lack of inventory,” Luong said.
In Carrollton and Coppell, for example, inventory stands at 1.5 months, according to Re/Max.
“We are still seeing nice homes in these areas getting multiple offers,” Luong said.
Despite the drop in home sales, the appreciation of home prices in DFW has been higher than in any other metro area in Texas, and the inventory of homes here is still the lowest in the state, Luong said.
“We are fortunate here in Dallas-Fort Worth,” he said. “We continue to see population growth, and it is still a very desirable place for companies and employers.”