Prospective homebuyers feeling discouraged, priced out in hot DFW housing market

Even though experts say inflation is cooling, it sure doesn't feel like anything is getting cheaper – especially when it comes to housing.

Many families across DFW are currently being priced out of affording a home. A local nonprofit on the frontlines of the housing crisis is sharing insight on the issue.

“Ten years ago, the median sales price for a home was $150,000 in the DFW area. Now, it's upwards of $350,000 and has even gone up to 390 I think at the top of last year. So it is, you know, virtually impossible for working families to be able to enter the market," said Donna Van Ness, president and CEO of Housing Channel Fort Worth.

The nonprofit supports lower-income and working families across all of DFW on the path to homeownership, through free housing counseling, financial education classes, and down payment assistance programs.

They also work with cities across the metroplex to construct new affordable housing.

But right now, they're seeing a decrease in class enrollment, possibly because people are feeling discouraged by rising interest rates and narrowing opportunities to become a homeowner and escape rising rent.

"You know, there's the home prices have just escalated and a lot of our buyers just can't compete because one out of five buyers is an investor. So a lot of those investors are paying cash – there’s 10 days [closing period], so it eliminates and causes a barrier for working families to be able to enter the homeownership market," said Van Ness.

The shortage of available housing is also adding to the competition.

"About 33% of the homes last year on the market were priced at a point that was available to the median income households in Dallas-Fort Worth. So 33% is not a lot,” said Van Ness. “And then if you talk about the low to moderate income households, that's even less at 11%. So you've got 11 of the market that working families can enter the market and that competition is already extremely high with investors."

Van Ness said prospective homeowners should know that the dream is still achievable.

“You don't necessarily have to buy your dream home right out of the gate. Think about just entering the market – maybe buying something smaller, maybe not in the neighborhood that you really want to live in and just enter the market,” she said. "And I think you will see that appreciation very quickly because it's a hot real estate market – then you can continue to trade up and buy and eventually get into your dream home in the future."

For now, she stresses that education is the key. She said a lot of their programs require only a $1,500 down payment and many other lender programs offer additional down payment assistance.

With that said, she says some cities are also trying to increase the income limits on their assistance programs because of inflation, but not all.

Van Ness adds it’s important for city councils to prioritize funding for more housing programs and resources in their budgets.

"I think it's important that the city councils hear from families and neighborhoods about what's happening to them and their neighborhoods so that they can prioritize resources and funding to more housing programs," Van Ness said. "There are the ways that people can enter the market and they're finite, they're limited. So we just need the city to understand that a thriving community is one that everyone has the opportunity to build wealth and that it supports the city in so many ways."

That's something the Fort Worth mayor has marked as a top priority in their ongoing budget talks. We're told the city is presenting its affordable housing strategic plan next Wednesday to the city council, before it potentially goes up for vote later this month.

And in Dallas, there's a push to include $200 million for affordable housing in its $1 billion 2024 bond package.

Looking ahead, Van Ness says she doesn't know if interest rates will ever go back to the lows seen during the pandemic. For those hoping the housing market bubble will pop soon – don't count on it.

“I don't know that we'll ever get back into the 3% and 4% years that we enjoyed in the last 10 years. But I do believe that they're going to decrease hopefully from the 8% and the 7%  that we're seeing now. However, quite honestly as far as real estate, I don't think property is going to get any cheaper,” she said. “I don't think that we will have any kind of bubble burst that people may be hoping for. I think it's better to always enter the market in areas that are up and coming.”

To get in touch with Housing Channel resources, call 817-924-5091 or click here.