Demand for homes in the greater Fort Worth area isn’t cooling off. Along with rising mortgage rates and inflation, the median price of a home sold in Fort Worth in April 2022 climbed to $355,000 – a 28.6 percent increase year over year.
Driving up the price of houses is the high demand from prospective homebuyers, coupled with the continued low inventory market. In April, there were 0.9 months of available inventory in Fort Worth and 0.8 months in Tarrant County. April now marks six months of inventory below 1.0 month in Fort Worth. The Texas Real Estate Research Center at Texas A&M University cites that 6.5 months of inventory represents a market in which supply and demand for homes is balanced.
“I believe we are still some time away from seeing what a normal market might look like,” said Shannon Ashkinos, 2022 President of the Greater Fort Worth Association of REALTORS®. “It does not appear that rising rates has really scared off enough buyers to create any weakness in pricing as yet, and the month of May is typically still strong in price gains. This continues to be a fantastic market for sellers who have been waiting to list their homes.”
One of the questions on everyone’s mind is when those rising rates will start to impact demand. Last week, Freddie Mac reported that the mortgage rates had reached its highest point since 2009. The average contract interest rate for a 30-year fixed-rate mortgage is at 5.64 percent, which is also driving up the demand for adjustable-rate mortgages.
“Mortgages now compared to just a few months ago are costing more money for home buyers,” said National Association of REALTORS® chief economist Lawrence Yun. “For a median-priced home, the price difference is $300 to $400 more per month, which is a hefty toll for a working family.”
NAR calculates purchasing a home is now 55% more expensive than a year ago. The rising mortgage rates and prices hurt affordability, and although wages are improving, Yun says they are “wiped away” due to inflation.
Although the inventory in Fort Worth was low in April, it did increase for the second month in a row. Active listings and closed sales are both down by just under 10 percent year over year. Average days on market dropped to 18, which is 9 days less than April of 2021. So far it has been a busy spring, but the impact of economic factors will be something to watch closely in the coming months.