Dallas Housing Market Weekly Update 2024! | Collin County Texas

Mortgage demand had its first year-over-year positive print since 2022. This means there are finally more people applying for mortgages than there were last year. So housing demand is still growing at a time where normally it would be headed straight down as we entered our seasonal decline. In fact, we have 6.4% more pending sales than we did last year, and we're almost to 2022's pending levels. Mortgage spreads saw a huge drop this week, and if you've missed every video where I've talked about the spreads, don't worry, I'll give you a brief summary here in a minute, but I did a long explanation in last week's video I think you should watch. Housing inventory grew just a little bit this week, same with new listings, and the number of homes having a price decrease actually saw a decline this week. We'll be covering all of this and much more in this week's market update. My name is Michael, I'm a real estate agent here in the Dallas area, and every Monday I give you a weekly update covering all of Dallas and Collin counties as well as the national market. We're looking for trends, we're tracking mortgage rates as well as mortgage purchase applications as that's our best leading indicator to what demand will look like 30 to 90 days from now. We'll be looking at things like median list price, days on market, how many homes are having price decreases, what's inventory looking like, and if you stick around until the end, it's my favorite part, the top 10 ranked hottest and coolest cities and zip codes in all of Dallas and Collin counties. If this sounds like something you're into, make sure and hit the subscribe button, and if you're looking to buy or sell in the Dallas area, whether it's next week or next year, I'd love to connect. I've helped every one of these yellow dots find their little piece of Texas, and I'd love to help you too. Just call, text, or shoot me an email. All that info is in the description below. Okay, today is September 30th. Let's see what the data is telling us. And if this is an old video, you can click the playlist here, and it'll take you to the latest weekly market update. First up is market news. Let's start by discussing the spreads. I explained in detail in last week's market news, exactly how and who sets mortgage rates. In fact, I probably after this, we'll go and just make a standalone video for that topic alone. So I can just reference it later. But when I say the spreads, I'm just talking about the difference between the 10 year treasury rate and mortgage rates. And this number has nothing to do with the federal funds rate that everybody is always talking about. And it has a massive impact on mortgage rates. Basically, when the banks believe there is more economic stability, then the spreads will improve or get smaller. For the last few years, especially last year, the spreads have been awful, which is why mortgage rates have been so high. So this chart shows you the spreads, and you can see as of this week, look, we have been trending down for two weeks now very sharply. And so right now, the spreads are 0.44% better than they were last year, which is way up here. So you see how much lower we are this year compared to last year. So this 0.44 means if the federal funds rate and the 10 year were exactly the same as they were a year ago, mortgage rates today would be nearly half a percent lower than they were last year. Again, with everything else being the exact same. And just look at this chart. 2023, look how bad the spreads were. Historically, that's one of the worst years. And as you can see down here at the start of 2022, we were at 1.57%. And I believe our average is somewhere around like a 1.8%. It's definitely below 2%. So we've been way, way higher, almost double our average most of last year. So what this means for you is if the spreads continue to drop like they are now all the way back to that 1.8% average, then mortgage rates would be another half a percent lower, even than they are right now. And that's without the Fed even cutting rates at all, which means mortgage rates would be all the way down to 5.7% with no Fed rate cuts. But of course we know the Fed is going to continue cutting rates. So if the Fed continues to cut rates and the 10 year drops another 1% and the spreads tread down to that 1.8% number, you would be looking at 4.7% mortgage rates. So I say this to tell you, one, the spreads are very important. Two, they're trending in a good direction. And three, we are not that far from 4.7% mortgage rates. Now I'm not saying it's going to happen next year, but I think the trend is going to continue that way. But the point I'm trying to make here is the spreads, which most of you have probably never heard of, have a massive impact on mortgage rates. And they are finally clearly trending in the right direction. And then if mortgage rates do get all the way down to that 4.7%, you can know that housing prices are going to be much higher than they are now. Because already we're seeing pending sales nearly back to 2022's levels. And that's with mortgage rates still at 6.2%. So if you really do believe mortgage rates are going to trend down all the way to a 4.7% or even a 5%, by far your best bet is to buy now, lock in the prices where they are now, wait and refinance later. On a 500k house that you buy today at a 6.2%, if you're able to refinance at that 4.7% later, that's literally going to save you $500 a month, but your price will already be locked in. And the last thing I want to talk about was I came across this article on housing affordability and I wanted to read you a few quotes. So this is according to a third quarter affordability report by Atom. That's A-T-T-O-M. And here's some quotes. The first, home buyer affordability conditions improved for the fourth consecutive month with lower mortgage rates, rising incomes, and slower home price growth, giving prospective buyers' budgets a much needed boost. When comparing median priced homes and average national wages, home ownership expenses take up 33.5% of a typical household budget. That's a bit better than in the second quarter of 2024, but unchanged from a year ago. And honestly, that was surprising to me. I actually thought that number would have been worse. So to buy the median priced home with average wages right now would only take a third of your income. I really thought it was a lot more than that. And remember, that number is only going to improve every year as your wages go up and mortgage rates come down. And I made a video about this a few weeks ago that I think you should check out. Basically, if your mortgage payment would be higher than you want it to be today, every year from here on out, as mortgage rates drop and your income goes up, it will be a smaller and smaller percentage of your income. But again, you will have locked in the price. Another quote here is, the national median mortgage payment by applicants fell by 5.2% between July and August. This of course is because rates dropped. So that of course is because mortgage rates dropped, but how cool is that? A 5.2% drop in mortgage payments month over month. And then the not so good news is, home prices are still rising as well. Adam's report indicates that 63% of counties analyzed saw median home prices jumped between the second and third quarters. While 85% of counties had a higher median price than a year ago. And then something I just wanted to share because this is blowing my mind. Geographically, the Northeast and West remain the least affordable regions. The counties where homeownership costs make up the highest percentage of average wages are Santa Cruz County, California, where homeownership cost is 108.5% of average wages. 108% of your paycheck would be going towards your mortgage. More than the average salary would be going just towards the mortgage payment. Followed by Brooklyn, New York at 108%. Maui County in Hawaii, 103.6%. Marin County, California, 100.6%. And San Luis Obispo County, 97.5%. Guys, I knew it was bad over there in California, but I had no idea. Your mortgage payment takes 108% of the average salary. So that's crazy. And I just realized the spreads chart has been up that whole time. So I hope you've been enjoying that. Now let's move on, starting with national housing inventory. This week, we had a small increase of 5,768 more homes for sale in the country. This keeps us at that same 37% number that we were at last year. We have 30% more than we did last year. That's exactly where we were last week. And this gets us to 731,017 homes available for sale in the country. A fun fact is the same week last year, inventory was only at 534,726. So we're doing much better this year. And if you see in 2022 and 23, we had a similar slump here that we had this year. And then we continued up until October, November. It'll be interesting to see if that repeats this year, but I am feeling more doubtful because those years at the end of the year, rates were climbing way up to seven, 8%. And this year it appears they're actually gonna be dropping. So I don't know that inventory is gonna climb like that this year. Then for reference, the all-time inventory bottom of 22, we only had 240,000 homes for sale. The peak of last year, we had 570,000. The same week in 2015, we had about 1.188 million homes for sale. So up more than double from the 22 bottom, but still have quite a ways to go to get back to a normal market, but we're getting closer every week. That's the good news. Now looking at new listing. So last week we had this huge spike up and that was because people heard the Fed cut rates half a percent. So home sellers thought, wow, this means buyers are gonna come back in. I need to list right now. That was what I thought was happening. And it definitely looks like that is exactly what happened. And even though they announced the Fed's half a percent rate cut, mortgage rates didn't move at all on the announcement. In fact, they're actually higher now than they were when they announced. That's because as we have been discussing the whole time, the bond market moves over a month ahead of time. So it was actually six weeks before that mortgage rates dropped. And you'll see that here. We had mortgage rates actually dropped. We got our first spike. And then there were the people who didn't know that and don't understand this. And they just heard the Fed cut rates half percent and then they jumped to list. So this is just a perception jump. This is not mortgage rates again are actually higher than they were then. And this is why it's very important that you understand how mortgage rates work. If you're waiting for the Fed to announce something, you are already six weeks behind. So this week, now that the hype is gone of the Fed saying half a percent, we're coming right back down to earth. We are still above the last two years though by a little, which is great news because it's not been that way most of the year. But otherwise, I believe this hype dies down and we just continue trending down for the rest of the year. So you can expect less and less new listings to come onto market every week for the rest of the year. So this week we had 63,022 new listings for sale in the US. Again, we're doing better than the last two years. Finally, let's hope that keeps up because to get into a normal market, we're gonna need that trend to continue. Now looking at pending sales, you can see the weekly pending contracts data is well above 2023 now. We really departed from that trend and have been going up the last few weeks. Again, this is just because rates dropped, but we are at 6.4% more pending sales than we had a year ago. And we're still heading up. You can see from the previous two years and if there were more lines here, this is what it looks like every year. Should just be trending down for the rest of the year. But you've also got to remember in these two years, mortgage rates were headed to 8%. This year, mortgage rates theoretically are gonna be heading even lower than they are now. So I don't know what's gonna happen with this line, but any chart where we can get even better than 2022's numbers, that is great news. So my hope is this is gonna continue flat like this. And even if it comes down, as long as we stay above 22, we're setting ourselves up for a really good and normal year next year. So as you can see this week, we had 362,620 homes pending in the country. Then the last thing we cover nationally is the percentage of homes having a price cut before selling. Every year it's normal for a third of these homes to take a price cut before selling. Looking at the national chart, we had a small drop this week. Well, I mean a decent size drop this week, but we are down to 39.26% of homes taking a price cut this week. Looking at the national chart, obviously this is not normal for this time of year. We should be trending up for the rest of the year. Well, at least until late October, maybe early November. But this just shows you there's more demand than there was these last two years. That's because rates have dropped. But as of this week, we are below 2022's line by 0.9%. And we're just about back to the peak of last year. And if this number trends down, it's gonna look totally different than these previous two lines. But whatever happens, just know it would be normal for this to continue increasing into late October. But if demand keeps coming in, this thing's not going any higher and we will have already seen the peak way back here. Okay, moving on to mortgage rates. We started the week at a 6.2 and we ended the week at a 6.2. So pretty much a totally flat week. Of course, that's up from last Friday, which we ended at a 6.15. But from the start to the end of last week, totally flat. The bigger news though is mortgage applications. They went up another 1.44% this week, which is not a big increase. And again, we're working off record lows. So it doesn't take much to get a several percent increase. So that was a small one. But the big news is we actually got above for the first time since 2022. We have a year over year positive print. That means we have more people applying for mortgages than we did last year. As you can see, we've not been anywhere near that all year. We finally crossed over. And that makes for five straight weeks of mortgage application growth. And I've been saying this all year, and I still believe it. And I'm going to keep saying it. There is no reason to believe we're going to see any significant mortgage demand growth with rates this high. The real demand is going to come in once rates stay below 6% for a sustained period. The evidence I have of this, new construction. They've been offering that this whole time, and they're selling significantly better than pre-owned homes. And when I say significant mortgage growth, I mean, we're going to go like this. If we get below that, we're going to go way beyond 2022's numbers if we can stay below a 6%. But as of now, we're still at 6.2. So we may continue to see these little growths, but below 6%, that's what we're waiting for. Okay, before we move on to local market data, if you're considering buying a home in Texas this year, two things. Number one, if you don't want to go broke buying a house, I've made a home finance course for you where we'll look at your actual spending habits straight from your bank account and figure out the exact number that you can spend on a mortgage payment without going broke. Then we take a look at how much that number will actually get you in today's market with today's rates. It takes into account things like how much should you save for a maintenance budget? How much more might your utilities cost? And everything all the way down to your income tax bracket. It's a no brainer for anyone who wants to have peace of mind about their home purchase. And then number two, if you're still a ways out and you just want to be fully educated on the home buying process so you have no questions when you step into it, I've made two courses. One is for pre-owned homes. One is for new construction homes. Choose the one that best suits you. They're very different processes. They have different contracts, deposits, timelines. So choose the one that's best for you. Links to all of those are down in the description below. Okay, moving on to the local markets, starting with the MLS data of Dallas County. We had 531 listings last week. That's 58 less than last week. 291 closings, that's five more than last week. Of the homes that closed, 52 were immediate sales, meaning they contracted within the first week. 291 went under contract. That's one less than last week. In total, there are 2,092 homes either under contract or in pending status. That's 10 less than last week. Moving on to Collin County, we had 355 new listings. That's 31 less than last week. 253 closings, that's 31 more than last week. 33 immediate sales, one more than last week. 183 went under contract, eight more than last week. In total, there are 1,810 homes either under contract or pending. That's 17 less than last week. And as you can see, the trend is less listings, more contracts. That's not what you wanna see as a home buyer because ultimately that will lead prices up. Okay, moving on to the market action index. If you've never seen it, it just takes into account all this data, puts it into one easy to read graphic with a number, a 30 or below means we're in a buyer's market. Above a 30, we're asking how much of a seller's market are we in? All we're looking for in this data is trends. Things should be cooling off from here until the end of the year. That's what we're looking for. So looking at median list price, it's right back down to where it was two weeks ago. We just saw that one little spike, but we're right back down. But overall, the trend is down. Things should be trending down towards the end of the year. Average days on market went up one. That's normal. Median days remains at 56. I'm still blown away that there are still 9% of homes being relisted. Again, that's people who had listed before that now they see rates came down. This is a lot of people relisting and that's part of what's helping with the new listings data. Number of homes having price decreases. This has been flat since really July. It's not increased at all. Inventory, that's the good news. It is still climbing here in Dallas and market action index is down to a 38, which is a slight seller's advantage, which you can see last month, we were just a sliver hotter than we are now. So a very slow cooling of the market. Everything looks normal. Let's move on to Collin County. Collin County is a 36, so they cooled off quicker than Dallas. But if you'll remember a few weeks ago, we had this big spike in the median price of new listings from 500 all the way to 615. We came down the next week and we are still higher than we were on August 30th, but slowly trending down as well. But Collin County is pretty hot right now. I know this says 36, but that's not how it feels from my end here. And you can see it. Median price of new listings went up. Median list price, at least, you know, it looks like the bottom was August 30th and it's not come back down to that yet. I'm not saying it won't, but when the trend should be down, it's not usual to see something go up and sideways. Their average days on market is climbing by two this week. Median finally jumped up to the same as Dallas up to a 56. Number of homes having a price decrease has been pretty flat again since July, basically. It went up a few percent since then. They're also having a ton of homes relist. They're at 8%. Their inventory has been very flat, but it's a totally different market because a lot of it's new construction where they're just releasing inventory as they know they can sell it. It's not the same as a market where most of the homes are pre-owned. I think that's one big contributing factor to this inventory looking much more flat than Dallas. And of course, the market action index slowly cooling off. Everything looks totally normal for the part of the season we're in. Now moving on to pending sales. This is Dallas County. You can see we're above where we were the last two years. We should be trending down more sharply than we are now. But again, nothing looks unusual other than we have more pending contracts, which is consistent with the national data. But the trend still should overall start going down like this. Collin County, on the other hand, is doing the opposite. Somehow they're having more pending sales and they're going up. Again, I'm telling you, I know that number was a 36, but Collin County definitely feels hotter than a 36. And you can see it here. Look at that. Pending sales going up. Look at the other two years. It was flat and then down. And actually, if you look from here, Collin County is in an uptrend of pending sales. If you were to draw a line touching these bottom points, that's an uptrend. It's not normal to see an uptrend from July to September 30th. And that certainly doesn't look like a cooling off market to me, but I don't know. Okay, moving on. Now we're looking at the hottest and coolest cities and zip codes in all of Dallas and County, starting with the hottest cities. Carrollton heats up one to take the number one spot. Ferris cools off one. Sachse heats up one. Duncanville cools off one. Lancaster remains. Irving heats up two. Louisville cools off one. Grand Prairie heats up one. Garland cools off two. And Plano remains at the number 10 spot. Then we like to zoom in on specific zip codes. The absolute hottest is Dallas 75244. Carrollton 75007. Hutchins 75141. Irving 75061. Allen 75013. Carrollton 75010. Dallas 75236. Plano 75023. Duncanville 75137. And Dallas 75234. Now looking at the same thing, but looking at the coolest markets, remember 30 or below is a buyer's market. So everything below here is a buyer's market. Blue Ridge cools off two spots to take the coolest city spot, followed by Leonard heats up one. Sunnyvale heats up one. Van Alstine remains. Anna cools off one. Whitewright heats up one. Prosper, Salina, and Rockwall remain. And then Farmersville jumps onto the list. As the hottest city on the coolest cities list, and it replaced Lavon this week. Then looking at the coolest zip codes, we have Blue Ridge 75424. Leonard 75452. Sunnyvale 75182. Dallas 75204. Van Alstine 75495. Rockwall 75032. Dallas 75220. Dallas 75212. Anna 75409. And Whitewright 75491. And all of these except the last two zip codes are officially buyer's markets. Remember if you're looking to buy or sell in the Dallas market, whether it's next week or next year, I'd love to connect. Just call, text, or shoot me an email. All that is in the description below. Thank you for watching. I'll see you in the next video.