Rates are currently the same as last week at 3.73% with .7% in fees and points. According to Freddie Mac, the economy is in a “Sweet Spot.”
Applications decreased 5% from one week earlier. Even though applications were down compared to the week before, they’re 10% higher than the same week one year ago.
DFW Market News
The numbers from November are in. When we compare this year-to-date data on single family homes to last year’s we get the following changes:
The hottest areas are pretty close to where they were last month:
#5 – Bedford
#4 – Grand Prairie (area 271)
#3 – Dallas Southeast
#2 – Arlington Central SE
#1 – Arlington Central NE
The inventory in these areas are six weeks or less. Meaning if no new listings came on the market, it would take about six weeks to sell all homes for sale given the current demand.
We’re closing on the end of the year and things are steady. Sellers still have the market, especially for anything in an affordable, more average price-point.
Mortgage rates increased a little from last week due to the overall positive economic sentiment. The economy is growing at a steady pace, fears of an economic downturn have diminished, and the job market is strong. Generally positive economic news leads to a slightly higher interest rates. Rates are up 5 basis points from last week and average 3.73% with .7% in fees and points for a 30-year fixed-rate mortgage.
Due to the positive economic outlook, the slight increase in rates did not deter prospective buyers from applying for a home loan. Mortgage applications increased 3.8 percent from a week earlier.
In other mortgage news, CoreLogic released their home equity report for the third quarter of this year and it shows that homeowners who owe more on their mortgages that what their homes are worth is down to just 3.7% of all mortgaged properties. To put that in perspective, at the height of the great recession ten years ago, that number was up to 25% of all mortgaged homes.
DFW Market and Economic News
The National Association of Realtors released their Housing 2020 Forecast, making predictions into what the market will look like in 2020. The forecast predicts that on a national level, home price growth will flatten, inventory will remain constrained, mortgage rates will stay under 4.0%, and that preferential treatment will be given to mid-sized markets that have more affordable products.
Here’s a crazy stat for you:
The largest population cohort in the country is those who were born in 1990. That group will turn 30 this year. Millennials will account for more than half of all mortgages next year.
Here’s where NAR’s report starts to break down for me.
They predict that sales growth in Dallas will be down 4.9% and the price growth will be down 0.5%. Now I’m not an economist and I don’t have all the data that NAR used to create their predictions. But I know what I see in the field.
I’ll start with saying that it is possible we will see fewer homes listed next year as sellers might resist listing their homes since prices aren’t growing at break-neck speed and sellers aren’t making money hand over fist. However, I think buyers would want to take advantage of low interest rates and less aggressive pricing scenarios, bringing up the demand
And for prices to go down? I just don’t see how that makes a lot of sense for what’s happening in DFW. If we look at the past as an indication of the future, we keep hearing about businesses choosing to relocate to DFW because of the corporate friendly environment we have with our tax structure and overall cost of living. We also have a good job candidate pool with multiple universities feeding into the local labor market. Just a few weeks ago we learned that Charles Schwab will move its headquarters to DFW. They’re currently building out their campus that holds 1600 employees to hold up to 6000 employees.
We have a strong multifamily housing market with an apartment occupancy of 95.5% according to the Dallas FED. Builders aren’t building enough inventory to keep up with the demand. Considering housing options are tightening while more people are coming to the area, I struggle to see why prices wouldn’t increase at all next year and why we’ll sell so fewer homes. Only time will tell whose crystal ball is correct.
If you’re a seller looking to sell a moderately-priced home in 2020, you’ll have a good amount of demand for your home. Buyers, if you’re looking for a home that’s above the affordable range, it will be a great time for you. With interest rates projecting to be below 4% and pricing to cool at the higher levels, you might have more buying power in 2020 than you would’ve in 2019.
Mortgage rates are holding steady with no change from last week. They’re currently at 3.68% with .5% in fees and points for a thirty-year fixed-rate mortgage.
Last week Freddie Mac’s economic and housing research group released their housing market forecast. They predict the average 30-year fixed-rate mortgage rate will be 3.8% for the rest of this month.
Looking beyond, they expect rates to average 3.8% in 2020 and 2021. For home sales, they expect the number of homes sold to increase each year but they predict the growth of prices will slow over the next two years. They’re forecasting prices to increase 2.9% next year and increase only 2.1% in 2021.
Mortgage applications are down 9.2% from last week. The Mortgage Banker’s Association Vice President of Economic and Industry Forecasting, Joel Kan said, "The purchase market overall looks healthy as we enter the home stretch of 2019. The seasonally adjusted purchase index was at its highest level since July, as a combination of wage gains, slower home-price appreciation, and slightly easing inventory conditions continue to support increased activity."
One last tidbit on mortgages, credit availability increased in November. This means that lending standards are loosening. Investors are becoming more willing to purchase loans with lower credit scores and higher LTV ratios.
DFW Economic News
The Dallas FED released their Economic Indicators report that told us economic expansion has slowed a little and unemployment went up a little, though it’s still near historic lows.
The apartment market is strong and is second for demand in the nation behind New York. Occupancy is high, at 95.5% and rents increased this quarter 2.9 percent from last year. If you want a little perspective, rents have increased 65% since 2010.
DFW Real Estate Market News
Here’s a look at the initial numbers for October sales for all properties listed on the MLS.
All indicators keep pointing that the market is going to stay about where it is for the foreseeable future.
If you’re looking to buy or sell real estate in DFW, let’s talk. Contact us on our website or call us at 214-803-4444.
We keep hearing that interest rates are very low right now. The FED recently cut rates, as of Freddie Mac’s latest survey on 11/27/19, the average rate is at 3.68% with .5% in fees and points.
There’s an easy way to find out if you can save yourself a few hundred dollars each month on your mortgage by refinancing without having to pay to refinance.
Here’s what you do:
Call up either the lender who originated your mortgage or who currently holds your mortgage. For another option, we can recommend some lenders for you if you want to use a new lender. Just contact us and request our lender list.
Here’s what you say:
What’s the difference?
When you refinance your house, there are fees. Lots and lots of fees. Title fees. Appraisal fees. Origination fees. The list continues but you get the point. It can be expensive and it can take years of lower monthly payments to recoup this cost. If you sell before you’ve recouped that cost, you’ve lost money on the refinance.
If you’re not sure how long you’ll stay in your current home but want to take advantage of lower rates, a no-cost refinance can be a great option.
Any questions? We’re here to help. Contact us with your real estate questions and we’ll either get back to you with an answer or connect you with someone who can.
Jennifer Shannon is a Texas real estate agent and broker, licensed since 2006.