Inventory numbers made a move in a positive direction in March, inching up from 0.6 months to 0.7 months of available inventory in both Fort Worth and Tarrant County. Eager buyers were waiting to make offers, as the number of days on the market dropped to 22 days, signaling the start of a busy spring and summer for the housing market.
Although it’s moving in the right direction, an inventory of 0.7 months is still far from 6.5 months, which is the number that represents a market in which supply and demand for homes is balanced, according to the Texas Real Estate Research Center (TRERC) at Texas A&M University. Dr. Jim Gaines, research economist for TRERC, pointed out that the market hasn’t had a balanced inventory in almost 10 years in a recent presentation to the Greater Fort Worth Association of REALTORS®.
In the midst of a supply shortage and a backlog of buyers, mortgage rates have risen by 1.5 percentage points over the last three months, the fastest three-month rise since 1994.
“Those buyers that have been on the fence are going to see the rates going up and they’ll get into the market – they’re not going to wait any longer,” said Shannon Ashkinos, 2022 President of the Greater Fort Worth Association of REALTORS®. “Home price increases are expected to slow down, but they’ll continue to go up as long as inventory stays at these historic lows.”
Active listings were down in March by 23.5 percent year-over-year, and the median home price in Fort Worth increased to $335,000. Two years ago in March 2020, that number was $248,000. According to NAR projections, home prices are expected to rise 5.1 percent in 2022, as people continue to push forward with homebuying plans, for now.
“Homeowners who are ready to move forward with pandemic-delayed plans will find plenty of opportunity this spring and summer,” says George Ratiu, Senior Economist and Manager of Economic Research at Realtor.com®. “Although accelerating inflation is leading to higher housing costs and living expenses, many buyers remain interested in finding a home.”
As inflation persists and mortgage rates continue to climb, economists will be keeping a close eye on housing affordability and its impact on demand.