The number of houses on the market in Fort Worth reached its highest level so far this year, giving prospective homebuyers more to pick from.
But while the recorded inventory of 2.4 months was an improvement from a year ago, it lagged well below 6.5 months, the level of inventory the Texas Real Estate Research Center at Texas A&M University regards as a balanced market.
High inventory arrived as home prices dropped from 2022 levels but mortgage interest rates above 7 percent put affordability out of reach for many prospective homebuyers.
The median home price in Fort Worth was $335,000 in August, down 4.3 percent from August 2022. Tarrant County’s median home price of $351,561 was down 3.7 percent from a year ago.
However, median home prices in Johnson County rose to $366,450 in August, an increase of 5.9 percent from August 2022. Parker County’s median home price of $476,950 in August reflected an increase of 6.7 percent from a year ago.
“Until mortgage rates start to come down, buyers are going to continue to be limited in their price range and therefore their options,” Bart Calahan, president of the Greater Fort Worth Association of REALTORS said in a statement.
“Home sellers are also feeling restricted, as they consider swapping a loan with a low rate for a much higher one,” Calahan stated.
As a result, home sales have taken a hit throughout this year. During August, 1,071 homes sold in Fort Worth, a decrease of 4.1 percent from August 2022. Across Tarrant County, the sale of 2,187 homes was down 9.9 percent from a year ago.
Sales of homes in Parker County were down 8.3 percent in August compared with a year ago. Only Johnson County recorded an increase in sales in a year-over-over comparison. Sales rose 3.5 percent during August compared to a year ago.
Despite the challenges facing buyers, sellers and the real estate industry, national trends indicate that about one-third of homes on the market are selling above asking price and bidding wars over desirable homes are recurring, according to Dr. Jessica Lautz, deputy chief economist for the National Association of REALTORS.
“Until the Fed makes the right decision on the Fed Funds rate, buyers will continue to see higher home-buying costs,” Lautz said. “These higher rates will continue to exacerbate housing inequality and limit the number of first-time and minority buyers.”
The interest rate on a 30-year, fixed rate mortgage averages 7.19 percent. A year ago, the rate averaged 6.29 percent on a 30-year fixed-rate mortgage, according to Freddie Mac.
The current 15-year fixed rate mortgage averages 6.54 percent. A year ago, the 15-year fixed-rate averaged 6.29 percent.
“Given these high rates, housing demand is cooling off and now homebuilders are feeling the effect,” Sam Khater, chief economist for Freddie Mac said in a statement.
“Builder sentiment declined for the first time in several months and construction levels have dipped to a three-year low, which could have an impact on the already low housing supply,” Khater stated.