Austin leads Texas in home cost hikes with Dallas prices up 7.8%.
Nationwide home prices rose in January by the largest annual percentage in eight years.
But Dallas-area prices aren’t going up as fast as the rest of the country.
Dallas home prices rose 7.8% from January 2020 levels in CoreLogic’s latest home price index.
Nationwide prices were up 10% year-over-year – the greatest such gain since 2013.
Rising home demand and tight home supplies are driving prices higher. And CoreLogic says homebuyers will continue to be challenged to find affordable properties.
“Despite first-time buyers driving high demand, entry-level homes remain in short supply,” CoreLogic chief economist Frank Nothaft said in the report. “Homes priced below 75% of the local median price had 14% annual appreciation, negating most of the benefits of record-low mortgage rates.
“When interest rates rise, the affordability squeeze for first-time buyers will become even more of a challenge.”
Looking at the major Texas metro areas, Austin had the biggest home price gains – up 11.8% from January 2020.
Fort Worth had a 9.13% home price rise.
And prices were up from a year earlier by 6.94% in San Antonio and rose by 6.7% in Houston.
CoreLogic predicts that home price appreciation in the U.S. will slow to only about 3% in the next year. And prices are forecast to rise by less than 1% in the Dallas area.
However, these forecasts have a history of missing the mark.
Home prices in North Texas are at a record high.
In 2020, the median price of homes sold by real estate agents rose by 6.4% in the Dallas-Fort Worth area.
And sales were up by almost 9% year-over-year with more than 112,500 properties changing hands.
“Record-low mortgage rates were a significant driving force behind last year’s rebound in housing market activity,” Frank Martell, president and CEO of CoreLogic, said in a statement. “However, heavy competition for the few houses on the market drove home prices to historic highs, and mortgage rates are no longer enough to sway the affordability challenges for consumers.
“While new construction may help balance home prices towards the end of 2021, we may expect to see demand slow in the medium-term.”