To buy or not to buy a house in Fort Worth? Real estate expert weighs in on current market
High interest and mortgage rates paired with rising property taxes and fierce competition seemingly make for a hostile housing market, but not all hope is lost for homebuyers going into summer.
Economic uncertainty spurred by the U.S. nearing its debt limit could lead to a recession, which historically lowers interest rates on homes to maintain affordability.
Dirk Mateer, senior economics lecturer at The University of Texas, told the Star-Telegram that the usual trend of the number of home buyers falling during a recession may not be the case this time around.
“If interest rates were to fall because we were in a recession, which is what the government would try to do to spur us out of it, home buyers might be like ‘Oh great interest rates are falling again. Now I can afford the home I want and I better get that interest rate now’,” he said.
As the U.S. economy faces economic uncertainty and talks of a recession increase, here’s what to know about buying a home in the Dallas-Fort Worth area this summer.
What does the housing market look like in Dallas-Fort Worth?
The heavy inflow of people moving into the Dallas-Fort Worth area has kept interest rates high and home prices stable, said Sriram Villupuram, finance and real estate professor at The University of Texas at Arlington.
Homeowners who secured a lower interest rate a few years ago have reason to stay put in their homes during times of high interest rates, cutting off an avenue of existing home supply, he said.
One option for homebuyers could be to purchase a new build. Some national developers have their own banking arm which can offer lower interest rates than what a separate bank could offer, Villupuram said.
Although these new developments are further out from central Fort Worth or Dallas, a 30-minute commute doesn’t seem to deter people who are moving into the area, he said.
As far as whether or not to buy during a recession, Villupuram said it all comes down to how you and your household are impacted.
“Recession may or may not come, the question is what does it mean to you, you need to assess that,” he said. “And if you think that you’re going to be mostly protected — especially if you’re a two income household, you know, ‘Are both of us going to be affected? One of us going to be affected, the other will be in a safer position?’ — those are all the things that can come into play.”
What should homebuyers in DFW know before they buy?
On average, it takes about six to seven years before homeowners decide to move or refinance their mortgage loan, Villupuram said. Whether interest rates on homes in DFW fall or not during a recession, homebuyers should go in with a six- to eight-year vision of the direction their potential neighborhood could take.
Villupuram encourages prospective homeowners to do their own research using websites like realtor.com to check school district ratings. Homebuyers should also drive around their potential neighborhood to get a sense of the trajectory of the area.
Having a sense of where an area is headed can make all the difference in whether the home sells at a good price years after it was bought.
“If you have to pay a little bit of premium to go live in a better neighborhood, it’s definitely going to be worth it in the long run, so that’s something that they need to keep in mind,” Villupuram said. “A small premium means that down the line, liquidity is going to be better because everyone’s moving. A small percentage of people are saying ‘I’m going to live here and die here’ but a lot of us are going to go.”