Is now a good time to buy a home in Fort Worth? The answer is a bit complicated.

When Evan and Jeanna Ghormley began looking to buy their first house last year, they had no idea what the process entailed. Navigating loans, property taxes and housing inventory in North Texas’ hot residential market was a learning process every step of the way.

A few months into their search, the Fort Worth couple found out they were expecting a baby in mid-July. They ramped up the search and put in three offers on Fort Worth homes while simultaneously wrestling with the financial decision given the state of the economy.

Federal interest rates are at historic highs, average mortgage rates are more than double what they were two years ago, competition for homes is fierce and property taxes are going up.

“We were told by some people, ‘It’s never going to get better, so you might as well jump on it now.’ And other people were like, ‘Wait it out,’” Jeanna Ghormley said. “So, we were just confused at what we should do, if we should wait for the market to kind of cool down, or if we should just try and hurry up and buy something before it gets crazy, even more crazy than it already is.”

The Ghormelys’ question — Is now the right time to buy a home? — is one that doesn’t have an easy answer.

More people flock to Dallas-Fort Worth

Some experts say they don’t see North Texas home prices going down as long as the area continues to see more people moving here population and a strong job market.

The median home price in Fort Worth in April was $336,250, which was about 5.3% lower than a year go, though higher interest rates are likely to swallow up the savings.

Dallas-Fort Worth is the fastest growing metro in the U.S. The Metroplex is already home to nearly 8 million people, but by 2045 that number could increase by 3.4 million, according to January forecasts from the commercial real estate agency JLL.

Bud Weinstein, a retired SMU economics professor, said the DFW housing market is arguably the strongest in the U.S. for this reason.

“If there is starter home inventory out there, the price appears reasonable, and you think you could afford it, I’d say yes,” Weinstein said. “Particularly because this is Dallas-Fort Worth. It’s not Chicago. It’s not Los Angeles. It’s not another large metropolitan region that’s losing people, losing jobs. We’re gaining people, we’re gaining jobs.”

From January to February, Dallas-Fort Worth saw a more than 17% increase in the total dollar amount of homes sold, according to the Texas A&M Real Estate Research Center, though first-time buyers are still finding good deals in some areas.

The regional economy’s growth means housing prices could keep going up. Weinstein said this is good for those looking at housing not just as a place to live, but also as an investment.

“For many American households, home equity is the single largest asset,” Weinstein said. “As an economist, I would say to any prospective home buyer, don’t look at housing primarily as an investment, think of it as a place to live. But if the value of your home appreciates, and you can capitalize on that appreciation, so much the better.”

Interest rates and home prices have a trade off

Mark Roberts, director of research at real estate investment firm Crow Holdings, also pointed to increasing home prices in North Texas.

The median listing price of a Dallas-Fort Worth home at the beginning of the COVID-19 pandemic was around $330,000, Roberts said. Compare that to median listing prices today, and North Texas homes are about $460,000, Roberts said.

Meanwhile, federal interest rates are at a 16-year high in what has been the most rapid rate-raising cycle in four decades. Higher rates from the Federal Reserve mean home buyers could get shackled with higher home mortgage interest rates.

As of Thursday, the average rate for a 30-year fixed mortgage was 6.35%, a major contrast from two years ago when the average rate in May was less than 3%, according to federal home loan mortgage company Freddie Mac.

“You take the combination of that higher home price and higher mortgage rates, and that monthly mortgage payment has gone from about $1,100 per month to $2,400 per month,” Roberts said.

Roberts, who has spent 30 years in the investment world, said it could be worth waiting a bit to see what happens with inflation and interest rates if a prospective buyer can afford to. But he acknowledged the tradeoff — waiting for lower mortgage rates could mean home prices keep rising.

Leslie Purvis, associate director of TCU’s real estate center, predicts interest rates will go down, but it’s going to be slow and not overnight.

“Everybody’s going to be different, depending on how much money they make,” Purvis said. “I would be more inclined to want to buy, because I don’t see our housing prices dropping, and I don’t see interest rates dropping to a degree that I would hold off buying a house for two or three years.”

If this is the case, the money a homebuyer saves on waiting until interest rates are lower could be diminished by the increasing price of housing, Purvis said.

Potential for refinancing as interest rates change

Brady Bridges, broker and owner of Fort Worth-based Reside Real Estate, said people are still buying and selling inventory everyday in DFW despite high rates. With current rates where they are, refinancing down the road could be an option for some.

“Most of the lenders right now because of the interest rate environment are offering one free refinancing in the future,” Bridges said. “So, for sure, if you’re ready, you need to jump on it.”

Refinancing a home means that if and when interest rates drop, homeowners can replace their existing mortgage with more favorable rates.

Owning a home gives people stability, and real estate is the fastest way to build wealth at the end of the day, Bridges said.

Shana Martin, broker and owner of Haslet-based Martin Realty Group, also pointed to refinancing as interest rates could come down in the future. Martin said she and other colleagues frequently tell prospective buyers to “marry the house and date the rate.”

“If you can afford to buy and I mean, you may have to buy a little bit of a smaller home to make it affordable, but if you can, you can always refinance later or you can keep that for a rental and upgrade at a different time,” Martin said.

While refinancing can be helpful, there are drawbacks to consider when making the financial decision. If interest rates will in fact come down in the future as some experts predict also remains to be seen.

And then there’s property taxes...

Meanwhile, as North Texas homes go up in value, experts say potential buyers must also be aware of property taxes. Tarrant County property taxes have already dramatically increased since the start of COVID, and values are expected to increase by another 10% to 20% this year.

Some Fort Worth elected officials have discussed lowering city property taxes, but it remains to be seen if action will be taken. While Purvis said she hopes lower taxes will be possible, she knows there is a long road ahead when figuring out exactly how.

“When you decrease the city property tax rate, then what city services are you going to cut back on?” Purvis said. “As we’re continuing to grow, the city has to put in more infrastructure and they need to provide more services to the citizens in the city. I don’t see how we can continue to be a popular place for people to move if our city starts cutting back on city services.”

Mike Davis, an SMU economist, said the question of whether to buy or sell relates to someone’s lifestyle.

“I don’t think houses are generally not good investments, but houses are lifestyle decisions. If you intend to stay in a particular neighborhood for a while, you like the neighborhood, like the house and can take care of the finances to afford it, it’s a great thing to do. But it’s not something you need to rush into, because it’s not the best investment out there.”

Davis said he thinks diversified assets, low-fee mutual funds and saving early are better investments for the long term.

For the Ghormleys, the search continues. Increasing home values, high mortgage payments and property taxes have prevented the prospective buyers from making a purchase —at least for now.

Having their own home is not a need, but it would be helpful for their growing family. They believe there is a steadiness and security that comes with owning.

“We want to get out of renting and own something, invest in something versus what feels like throwing money away,” Jeanna said. “With renting you pay basically as much as a mortgage for something that you never get to see the fruits of.”