Dallas-Fort Worth saw a ‘staggering' 25% jump in home prices last year. Will it slow in 2022? (2023)

The value of a typical home in the Dallas-Fort Worth metro area cost just over $275,500 at the beginning of 2021, according to the real estate firm Zillow. By the end of the year, that home would set you back nearly $345,000.

That’s more than $69,000 in price growth over the year, a 25% increase.

“This is a level of annual price appreciation we just never expected to see on a broad scale in the country or major metro area,” said Jeff Tucker, a Zillow housing economist. “That is a staggering amount of price growth.” 

The growth in home prices has been driven by surging demand during the pandemic, and a constrained supply of housing, Tucker said. And while the housing market will cool off some this year, competition for homes will remain high.  

“The sellers are in the driver’s seat. They don’t have much competition from other sellers in the form of active listings, and there’s tremendous demand for people to buy homes,” Tucker said. 

What’s next? 

The pace at which home values are shooting up is expected to be a bit slower this year. Some of that slowing looks to have already started over the past few months, with home prices growing less quickly in the fall than they did during the summer.  

But that doesn’t mean homes will be getting any cheaper, or that things are going back to any pre-pandemic “normal.” Home values will still go up, and fast – just not quite as fast as they did in 2021. 

“For 2022, we expect less price appreciation for the whole year than we had this year, but not that much less,” Tucker said. “It will still, I think, be the second fastest year of price growth on record.”  

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Mortgage rates are also likely to increase, which typically cools demand in the market that helps drive up home prices. That’s because the Federal Reserve announced it will start cutting back on its pandemic bond-buying program to rein in inflation.  

Supply chain bottlenecks are expected to continue improving, likely reducing the cost of materials going into new homes and speeding up the pace of homebuilding.  

Luis Torres, a research economist with the Texas A&M’s Real Estate Research Center, thinks the market will return to something closer to normal in 2022, which is ultimately better for everyone, because of decreased demand from homebuyers and increasing supply of new homes. That’s a good thing, he said.

“You want a stable, steady housing market that allows it to be sustainable and to last for more years,” Torres said, “instead of a really high, active market boom where you’re more at risk.” 

Reduced supply 

There simply aren’t as many homes on the market as their used to be: about 42.4% fewer homes were listed in the region at the end of 2021 as there were at the end of 2019, before the pandemic hit.  

Buyers are snapping up homes faster than before the pandemic, too. Zillow’s data shows homes are staying on the market for less than half the time they did before the pandemic – just over two weeks compared to more than a month.  

“That means buyers are bumping into each other on the same listings, getting into multiple offer situations, and that bids up the prices of homes,” Tucker said.  “And then, next month’s sellers will look around and see those prices that got set in [what are] essentially auctions” and factor that into their asking price.  

In this market, buyers have to make quicker-than-usual offers, often above what they planned to pay, and they have fewer homes available to comparison shop, Tucker said. They may also be tempted to make risky compromises, like waiving a home inspection. 

Increased demand 

Luis Torres from Texas A&M’s research center said the pandemic presented a “perfect storm favor of the housing market.” 

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For the most part, he said, “the households that were going to buy a home, or who own their home, they weren’t affected [financially] by the pandemic. They worked in industries that could socially distance, and it allowed them to take advantage of historically low interest rates.” 

There are more people in Dallas-Fort Worth to shop for homes, too. The metroplex added more residents from 2010 to 2019 than any other metro area in the nation, and it was the leading destination in 2021 for people moving across state lines. 

“Put that all together, and you get very rapid price appreciation, homes selling very quickly, and generally just a very difficult environment to be a home buyer, especially a first-time home buyer,” said Jeff Tucker. 

This housing market, Tucker said, is largely a product of the federal government’s pandemic relief efforts. Despite job losses that resembled the Great Depression, an unprecedented level of stimulus and supportive policies helped keep the economy from falling into a tailspin.  

Particularly relevant, Mortgage forbearance allowed people to pause mortgage payments and get back on their feet without facing foreclosures. And Tucker says it worked: After the mortgage forbearance expired in October, foreclosures have remained below pre-pandemic levels.  

While a 25% price hike over the course of a year is discombobulating, Tucker said it is also a much better alternative to another major housing crisis. 

Tough market for renters

Life for renters seeking a new rental home aren’t a whole lot easier. Vacancies are low, Tucker said, and prices are up. 

Overall, rents went up 16% in the last year, according to Zillow’s rent tracking index.  

“This is a difficult to be a renter, just as it is a difficult time to be a home buyer,” Tucker said. 

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The company ApartmentList calculates its rent price tracker a bit differently than Zillow, and puts the rent increase in the Dallas-Fort Worth region at nearly 18% over 2021. That’s a larger rent increase than either Texas as a whole or the rest of the nation.

Part of that increase may well be attributable to landlords cutting back on enticements like a free first-month’s rent for new tenants in as the economy has recovered, Torres pointed out. This year’s rental rate increases may also reflect the decision by many landlords to avoid raising rents in 2020.

Everything in demand

 Early on in the pandemic, a shift in buyer preferences was visible: Would-be home buyers put a higher priority on extra space, Tucker said. Larger, detached single-family homes have been the hottest commodity since the pandemic hit. Home offices and space to social distance became key. 

Home buyers also showed less of a priority for proximity to offices or nightlife and other amenities than they did before the pandemic. 

Those big houses stayed popular, but demand for condominiums and town homes surged in 2021 to match, Tucker said. 

As the inventory of houses on the market declined over the year, with prices and competition going up for single-family homes, would-be buyers began showing a keener interest in condos and townhomes, driving up prices there, too.  

“It’s really a wave of demand that is hitting every home type and location,” Tucker said. 

Staying longer 

Since the 2008 housing crisis, people have also tended to stay in their homes longer, which reduces the supply of homes on the market. People are staying in jobs longer. They seem to have grown more risk averse, according to Torres, and are less likely to pick up stakes and move across the country. Older homeowners are also putting a premium on aging in place.  

There’s also a class component to people staying put, Torres said: Wealthier, college-educated people have been more likely to move – often into larger homes – while stagnant wages for people at the bottom end of the income spectrum may have kept many from moving at all. 

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“Especially for the lower [home] price ranges, tenure increased more. And that goes back to the fact that incomes didn’t increase much for the bottom, from the middle class down, and I think that also affected the movement of people,” Torres said.   

Can’t build ‘em fast enough

Another factor limiting supply: Too few homes have been built since the Great Recession to meet the fast-growing population of the region, according to research Tucker led.  

“Homebuilders have been building a lot there, but it’s hard for them to keep up with demand,” Tucker said. 

The challenges for builders – including increased supply costs, a shortage of skilled trades workers, a shortage of affordable land for development – preceded the pandemic, and have gotten significantly worse, said Torres.   

“Every time I talk to a home builder, they say to me: There’s no land right now, there’s no lots. It’s really difficult to get the financing to develop lots, and the ones I get are really expensive,” Torres said.  

Torres said it’s tough for builders in North Texas to make a profit building houses under $300,000. That spurs the development of higher-end homes, pushing up median home prices. 

New home prices are set by five L’s, he said: Lumber and building supplies, labor, land prices, lending and interest rates, and laws and regulations.

In each of those categories, builders have faced headwinds in recent years, slowing production and raising the cost of construction. 

Got a tip? Christopher Connelly is KERA's One Crisis Away Reporter, exploring life on the financial edge. Email Christopher atcconnelly@kera.org.You can follow Christopher on Twitter@hithisischris.

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Will home prices Drop In Dallas 2022? ›

According to Zillow, the typical home value for the Dallas-Fort Worth area rose by a whopping 27.1% in the past 12 months and their forecast is that it will rise by 4.2% by July 2023. It shows that Dallas housing prices are likely to continue to rise even if there is a downturn in the current market.

Will the housing market crash in 2022 in Texas? ›

Overall home sales have been in freefall since around April. At the current rate, 2022 sales will likely fall short of 2021. According to the Center's Data Relevance Program, the sales level was down 16.3 percent from a year earlier. Sales in all major metros remained low as mortgage pressures rattled buyers.

Is DFW housing market slowing down? ›

Home sales continue to cool in Dallas-Fort Worth and inventory on the market keeps climbing, while home prices are rising at a slower pace. Active housing inventory in the DFW market is up 94% over last year, while sales are down 13.7%, according to the latest Re/Max National Housing Report.

Are home prices dropping in Fort Worth? ›

Between August 2020 and May 2022, the median home price in Fort Worth jumped 48% from $248,000 to $367,000. In the three months since housing prices peaked in Fort Worth, the median home price dropped almost 5% to $350,000.

Will house prices go down in Texas 2023? ›

While Texas home prices are not predicted to increase as quickly or as sharply as they did in 2021, buyer demand remains robust and is unlikely to diminish. As Bidding wars are typical, your home is likely to attract a large number of buyers.

Is DFW housing market overvalued? ›

Another study released last week ranked Dallas-Fort Worth as the nation's 18th most overvalued housing market. Houses in the North Texas market are selling at a 52% premium, according to a July analysis by researchers at Florida Atlantic University and Florida International University.

Is Texas housing market slowing down? ›

Report from Texas A&M University shows state's home supply remains much tighter than the national average. The Texas housing market is slowing down in the face of higher interest rates, but it remains healthier than the rest of the nation.

Will house prices go down in 2023? ›

As economic conditions continue to impact the country, industry experts are suggesting there will be less demand in 2023 which will likely result in house prices falling.

Is it a good time to buy a house in Texas? ›

Is the 2022 housing market the right time to buy a home? It is still a good time to buy a home in Texas. We have seen record growth in home prices in the last two years and although the rate of price increases may begin to slow this year, they are not likely to drop anytime soon.

Why are people moving to Dallas? ›

High Levels of Activity. Dallas is unique, considering everything we have at our fingertips – fine dining, high-level sports and entertainment, art, museums, outdoor activities, a lively music scene, and great weather.

Where are home prices falling the most? ›

U.S. metro areas where home prices are falling
  • San Jose, CA. –10.7%
  • San Francisco, CA. –8.5%
  • Seattle, WA. –8.2%
  • Denver, CO. –5.8%
  • San Diego, CA. –5.2%
  • Portland, OR. –5.1%
  • Las Vegas, NV. –4.8%
  • Phoenix, AZ. –4.4%
3 days ago

Why are houses so expensive in Dallas? ›

An above-average population of millennials, robust in-bound population growth, and a thriving economy are just three of the many reasons why the Dallas real estate market and demand for rental property are increasing.

Will real estate prices go down? ›

Economists at Fannie Mae expect prices to be, on average, 16% higher in the coming quarter than they were a year ago. MBA economists also expect home price gains for the foreseeable future. They forecast a 9.8% yearly increase for prices in 2022 compared to 2021 and a 2.8% gain in 2023.

How is the housing market in Fort Worth? ›

Fort Worth, TX Housing Market

The median listing home price in Fort Worth, TX was $368K in September 2022, trending up 16.8% year-over-year. The median listing home price per square foot was $187.

Should I sell my house now? ›

With continued supply shortages and high buyer demand, now is a good time to sell your home. And with interest rates on the rise, it may be better to sell sooner rather than later — if rates spike much more, some prospective buyers may retreat from home shopping. But consider your reasons for selling carefully.

Is it a good time to buy a house in Texas 2022? ›

Is the 2022 housing market the right time to buy a home? It is still a good time to buy a home in Texas. We have seen record growth in home prices in the last two years and although the rate of price increases may begin to slow this year, they are not likely to drop anytime soon.

Will Texas house prices go down? ›

Barring a recession, real estate experts don't expect home prices to come down anytime soon because Texas is still gaining thousands of residents and its job market is still growing — but they do expect prices to grow more slowly than they did over the past two years.

Will house prices go down in 2023? ›

As economic conditions continue to impact the country, industry experts are suggesting there will be less demand in 2023 which will likely result in house prices falling.

Why are houses so expensive in Dallas? ›

An above-average population of millennials, robust in-bound population growth, and a thriving economy are just three of the many reasons why the Dallas real estate market and demand for rental property are increasing.


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