Why D/FW’s Most-Affordable Homes are Gaining Value Fastest; Plus Other Reports

If your home in the Dallas-Fort Worth area is valued at around $200,000, checking Zillow might be worth your while.

Homes in the most-affordable market segment are appreciating in value the fastest, indicating the demand for the least expensive homes in many parts of the nation, according to a recent Zillow analysis.

In D-FW, the typical home value for the lowest tier was $194,484. The annual appreciation for the lowest tier was 9.5 percent in February, compared with 8.6 percent for the top tier and 8.9 percent for the middle tier. Zillow expects the typical home value in D/FW to grow 12.6 percent before February 2022.

That’s good news for sellers, maybe not so much for buyers who are interested in starter homes.

“Down payments for first-time buyers looking to purchase a home are increasing, a clear challenge,” economist Arpita Chakravorty wrote in the report. “But for households that currently own these more affordable homes and have built wealth through rapidly growing home equity over the past few years, it is possible to sell and realize significant financial gains (assuming they can find another home to move into — a challenge of its own in this current, low-inventory market).”

Austin, in what might be the nation’s hottest market, is the nation’s only market that has seen top-tier home values rise faster (14.9 percent) than the least-expensive ones (14 percent). That’s been going on since March 2020.

Other Notable Reports

• Realtor.com: Dallas ranks first nationally among the top-10 cities building the most homes for buyers, according to Realtor.com. The city issued 11,636 housing permits, a 23 percent increase over a year ago. The median list price of a house in Dallas is $373,267. “People have a newfound appreciation for how important home has been over the last year,” Phil Crone, Dallas Builders Association executive officer, told Realtor.com. “Our market being more affordable, that’s why you have such strong growth.” New York ranked second. Learn more here.
• RealPage: Apartment leasing in the Dallas-Fort Worth market rose in the first quarter and led the nation, according to Richardson-based RealPage. Developers completed 2,516 new rental units in Q1 while net leasing totaled 4,068 units, the strongest Q1 demand in more than a decade, according to the report. Miami, Fla., was second with 3,130 units. D/FW’s average monthly rent was $1,195 with 94 percent occupancy and 35,237 units under construction. Learn more here (subscription required).
• Fitch Ratings: Dallas-Fort Worth housing prices are 20 percent to 24 percent overvalued in Fitch’s latest Sustainable Home Price Report. Nationwide, Fitch reports home prices are 8.2 percent overvalued. Fitch Ratings estimates statewide prices are 15 percent to 19 percent overvalued. Researchers base their home-price risk reports on changes in home costs compared with increases in other economic indicators for each market. Learn more here (subscription required).

• Zumper: Frisco ranks as the most expensive D/FW city to rent a one-bedroom apartment, according to Zumper’s Dallas Metro Report for April. The report covers 22 cities and highlights the most/least expensive cities and cities with the fastest-growing rents. In Frisco, a one-bedroom rents for $1,300. Dallas was second at, 180. Mesquite was the least expensive with a 1BR going for $880. Learn more here.