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The Market This Minute: How North Texas Homes Are Selling at the End of Q3

Graphic of Homes and Dollar SignsAs we enter 2024’s final months, the trends we observed in our last two quarterly market reports continue as expected, along the same trajectory. Throughout the first two quarters of the year, we watched as our housing markets increasingly experienced growth in closed dollar volume for single-family homes, year over year. That trend has maintained in every market at the close of the third quarter.

 

Notably, several markets demonstrated even greater strength in the third quarter than they did during the first two, based on various metrics — in particular, closed sales volume and inventory levels. In Dallas County, closed sales were up 35 percent in Q3 compared to Q3 2023. More impressive is that inventory was up 52 percent for the same period. In Fort Worth (West Tarrant County), closed sales were up 15 percent and inventory up 44 percent. For Southlake (East Tarrant County), closed sales increased 22 percent, and inventory increased 42 percent. In Collin County, closed sales were up 32 percent, and inventory was up 67 percent. For Rockwall County, closed sales were up 66 up and inventory up 49 percent. In Parker County, closed sales were up 7 percent and inventory up 9 percent.

 

The months’ supply of inventory — how many months it would take for all the current homes on the market to sell — is also up across our market areas: 3.7 months in Dallas County, an increase of 55 percent from Q3 2023; 3.3 months in Fort Worth, up 63 percent; Southlake increased by 50 percent to 3.2 months; 60 percent up in Collin County, to 3.2 months; 59 percent up in Rockwall, to 4.8 months; and up 15 percent in Parker County, to 5 months. For reference, a market is considered balanced when there is about six months’ worth of inventory at any given time.

 

Another key factor driving the upper end of the market is a unique trend identified by the financial research firm Cerulli Associates: the growing availability of financial resources among generations that have entered their prime homebuying years. Baby boomers are transferring their assets to Gen X, millennials and Gen Z in ever-greater numbers, with those younger generations expected to inherit $16 trillion in the next decade — the most significant wealth transfer in history — according to The New York Times. Additionally, Reuters has reported that households in the United States have accumulated record net worth, hitting an all-time high of $163.8 trillion, in the second quarter of 2024.

 

This newly inherited wealth may bolster the upper price tiers of the market, which typically experience a higher degree of all-cash transactions. The lower price segments, meanwhile, will often depend more on mortgage financing. Mortgages have negatively impacted housing in recent years, significantly rising from historic lows of less than 4 percent to levels nearing 8 percent in the fall of 2023. These increases not only reduced the buying power of consumers, but also reduced the overall pool of buyers. Fortunately, mortgage rates lately are on a downward slope. The average 30-year fixed rate was 6.86 percent at the end of the last quarter, but it’s now down to 6.08 percent. Fannie Mae and other institutions are projecting further mortgage-rate drops over the next year. The continuous decline will help increase the affordability of homes and bring more buyers to the market, while also motivating sellers who have hesitated to list their properties for sale. Many homeowners have held back in the face of having to shop for a new property at a much higher mortgage rate than they currently enjoy.

 

The decline in mortgage rates directly correlates with other welcome data points. As has been forecast for some time, the Federal Reserve at last reduced interest rates, in September, by half a percentage point, its first rate cut since March 2020. The news arrives as the annual inflation rate continues its steady decline from its mid-2022 peak of 9.1 percent toward the Fed’s target rate of 2 percent, dipping to 2.5 percent for the 12 months ending in August. With economists widely predicting two more rate cuts before the end of the year, National Association of REALTORS chief economist Lawrence Yun has stated that the first slash in the Fed rate is usually a harbinger of more to come and that six to eight more reductions can be expected over 2025. This is all good news for the residential real estate industry and leaves us feeling bullish for a healthy market in 2025.

 

Additional economic factors support our optimistic outlook. According to the latest estimates, GDP will increase this quarter by 3.1 percent, following a second-quarter increase of 3 percent, as the U.S. Bureau of Economic Analysis reported. Despite fluctuations, stock markets have hit record highs at multiple points this year, including in September. Job growth in September was much stronger than expected, per the latest report from the U.S. Bureau of Labor Statistics, at 254,000 new jobs. The unemployment rate, per the bureau, changed little, at 4.1 percent — low relative to the historic average of 5.7 percent. News on employment had weakened consumer confidence in September, according to the Conference Board Consumer Confidence Index, which reported a decrease to 98.7 (1985=100) after a stronger and upwardly revised 105.6 in August.

 

I hope you find this report informative. And, I invite you to contact one of our knowledgeable real estate advisors at any time if we can ever help you with your real estate needs. No one knows the markets — hot and cold — better than they do.

 

Russ Anderson

President and CEO, Briggs Freeman Sotheby’s International Realty

President, Pacific Sotheby’s International Realty

 

See the markets now

Explore how seven top spots in North Texas are selling — including Dallas, Fort Worth and key cities across the area — here at our fast, fun and interactive Market Update.

 

Economic Factors

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