With the start of each new year comes the same set of questions from people. Whether I’m at my son’s basketball practice, my daughter’s dance recital or at lunch with a friend, people will typically ask, “What does the real estate market look like this year?” Other questions usually include, “When is a good time to sell my house” or “Are interest rates going to go down”? The answers to those questions (and more) can be found in the following five predictions I’m making for this year’s real estate market in the Dallas/Fort Worth metroplex.
Prediction #1 – Mortgage Rates will decline, but not by much.
The 30-year fixed mortgage rate, according to Freddie Mac, has been on the rise since mid-December and is currently hovering around 7%. The good news is that many experts predict those rates will lower a bit in 2025. According to the research I’ve done over the past month, I believe mortgage interest rates will decline to the mid-6% range and decrease even further in 2026. Rates will stay higher as long as the economy is outpacing expectations, however, and a lot of what happens in the market will be impacted by any policy changes implemented by the incoming Federal administration. Lower mortgage rates are always a good thing for new home buyers, but everything is relative, and even slightly higher rates can be viewed as an opportunity for existing home buyers looking for a deal. In addition, there are a ton of new home builders offering lower interest rates and mortgage lenders offering creative solutions for buyers with a budget. If you are interested in buying a home, reach out to me, let’s set up a consultation with my finance team to assist you in making a plan that best serves your needs and goals.
Prediction #2 – Waiting for lower rates will come at a price.
Good things come to those who wait, but the housing market doesn’t typically reward patience. It’s my belief that a lot of home buyers are waiting for interest rates to fall below 6%. However, from what I’ve seen, I don’t believe that will happen in 2025. During this same time, home values will continue to rise, especially in the Dallas/Fort Worth metroplex. In the last 10 years, the average sales price of a home in DFW has gone from $227,000 to $482,000. Spring will introduce more houses on the market and create more competition, so the likelihood that there will be competition amongst buyers will be increased. In real estate, it’s all about timing and information, so you’ve got to be proactive and put a plan in place with a real estate advisory team.
Prediction #3 – Home Inventory levels will stabilize to offer a more balanced market.
The real estate market in DFW has been on a bit of a rollercoaster the last few years, but it’s my belief that in 2025, we will see a more balanced market between buyers and sellers. Currently, we are in a buyer’s market, so if you are a home buyer looking for opportunities in the Dallas/Fort Worth metroplex, now is the time be more aggressive. Currently, there are almost as many price decreases per day as there are new listings that hit the market. The average “Percentage of Original List Price” is currently 96%. In theory, that means that if a home buyer finds a home that’s for sale for $400,000, they could snag the home for a closed sales price of $384,000. Within a typical apples to apples real estate transaction, that’s an approximate monthly savings of $141! We will most likely also see less competition, so the opportunities for buyers will be that much greater.
Prediction #4 – Sold homes in DFW will see a decline for the 5th year in a row.
The best time to sell your home is traditionally in the spring and early summertime periods. The weather is nicer, homes look better, and people traditionally move before the summer for a variety of reasons. For the past several years, the number of homes that are for sale in DFW traditionally increase dramatically from December to August, then decrease as we head into the winter. With that being said, according to our North Texas MLS data, there were approximately 13,000 homes sold in June of 2021, 12,000 sold in June of 2022, 11,500 sold in June of 2023 and 10,000 sold in June of 2024. We have seen increases in inventory but decreases in actual sold homes across the metroplex. This decrease can be attributed to high sales prices, complicated interest rate conversions from selling a home to purchasing a new one and increased costs for things like home insurance, etc. I believe that this summer will show sold numbers right around the 10,000 number, or slightly below (for all North Texas). It’s always best to stay ahead of the curve if you can, so if you are looking to possibly sell your home, reach out to me for specific market info related to your neighborhood and your timeline.
Prediction #5 – The DFW market will be ranked #1, again.
The North Texas real estate market is once again shaping up to be one of, if not, the best in the country. According to the Urban Land Institute’s annual Emerging Trends in Real Estate forecast, Dallas/Fort Worth is ranked the #1 top market for real estate. DFW leads the list, followed by Miami, Houston, Tampa, Nashville, Orlando, Atlanta, Boston, Salt Lake City and Phoenix. Relying on data and insights from over 2,000 top real estate specialists, the report lists DFW as the ONLY Texas market to rank in the top 10 for the past six years! Why is DFW ranked #1? We have a growing economy, a favorable cost of living (compared to other metro areas), an expanding job market for many businesses moving to DFW, and quality of life. 2025 is poised to be a great year for real estate in the metroplex!
On a side note, I'd like to personally thank Mike Bartman with SWBC Mortgage and Ali Holcomb and Justin Hibbard with Republic Title of Texas for their collaboration with and contribution to these market predictions. My affiliate partnerships are invaluable and I truly value their collaboration and market knowledge.