While the typical initial payment for a new residence in the Dallas-Fort Worth area has decreased significantly, it is still almost twice as much as it was just four years ago.
Earlier this month, The Dallas Express reported that home affordability in the United States has reached reached its lowest point since the 1980s. Much of this stems from the swift increase in housing prices. In 2019, the median Dallas-Fort Worth home sold was priced at $275,000. Last year, that figure jumped nearly 44% to $395,000, The Dallas Morning News stated.
As of December 2023, the typical initial payment in DFW was $91,121, or about 16% of the property value. Although this indicates a decrease from the $113,806 mean in May 2022, it is still over 50% higher than the $59,394 typical initial payment recorded in January 2019.
Developing an initial payment is just one of the obstacles potential homeowners encounter. They also struggle with the challenge of historically high interest rates, which are making the affordability crisis worse. This week, mortgage rates — which are affected by central banking policy — climbed exceeded 7% in the United States for the first time in 2024.
It turns out those rates could remain high for longer than anticipated. On Tuesday, Federal Reserve Chair Jerome Powell indicated indicated that the central bank will likely have to wait longer than initially hoped following due to a series of higher-than-anticipated inflation readings.
“The recent data have clearly not given us greater confidence and instead indicate that it is likely to take longer than expected to achieve that confidence,” Powell said during a recent panel discussion at the Wilson Center in Washington, per BNN Bloomberg.
Sriram Villupuram, a professor at the University of Texas at Arlington’s Department of Finance and Real Estate, said initial payments in Dallas have also been affected by the city’s limited housing supply.
Last year, housing inventory averaged 2.6 months, according to the Texas Real Estate Center. A six-month supply is considered stable in the housing market, according to Villupuram, per DMN.
