Jan 20, 2021
100,000 more Dallas-Fort Worth homes just became affordable
According to research by Spatial Laser, Inc.
As mortgage interest rates fell, 73,000 more homes became affordable in 2020 to households making $50,000 per year. Of these, 42% of the newly affordable houses are in areas of the Metroplex with strong schools and access to jobs. Also in 2020, for households earning $70,000 per year, 106,000 more houses became affordable. Of these, 73%, or nearly three-quarters, are in areas with strong schools. “The decline in mortgage rates has opened up opportunities to more home buyers, resulting in strong demand and low inventory,” said Steven McCord, Co-Founder of Spatial Laser, Inc., a Plano-based based real estate technology, or “proptech” firm.
Mortgage rates at record lows
The 30-year fixed mortgage rate, the most popular loan product, fell to historic lows at least 14 times in 2020, according to Freddie Mac. Mortgage rates are lower than they have been since the government started tracking them in 1971.
73,000 homes became affordable to households earning $50,000 per year
Lower rates result in lower monthly payments. Thanks to these lower payments, more houses are affordable now compared to just one year ago. In 2020, 73,000 more homes in the D-FW area became affordable to households making $50,000 per year. Similarly, in 2019, 67,000 new homes became affordable.
Many of these newly affordable homes are concentrated in Garland, Mesquite, Irving, Grand Prairie, and the city of Fort Worth. Many of the homes are in areas with strong fundamentals, with 42% of the total, or 33,000 houses, located in areas that score a 6 out of 10 or higher on the Locate Alpha Homeowner Index, a combined index developed by Spatial Laser. This index is heavily weighted on school performance, crime and access to amenities. Some homes do even better, with 14% of the total in areas scoring 7 out of 10 or above.
There are opportunities for investors too. 77% of the newly affordable homes were in areas scoring a 6 out of 10 or higher on the Locate Alpha Long-Term Investor Score, which is heavily weighted on rentability: access to jobs and to generate cashflow for the investor.
106,000 more houses became affordable to households earning $70,000 per year
Similarly, for households earning $70,000 per year, 106,000 more houses in Dallas-Fort Worth became affordable 2020, thanks to lower mortgage payments.
For those buying homes on the Dallas side of the Metroplex, newly affordable opportunities entered the scene in areas such as Little Elm and Carrollton. On the Fort Worth side, they appeared in areas including Saginaw and Arlington. Many of the homes were in neighborhoods with strong fundamentals, with 72% of the houses, or 76,000 units, located in areas scoring 6 out of 10 or above on the Locate Alpha Homeowner Index, and 43% scoring a 7/10 or above.
For investors, 54% of the homes scored a 6/10 or higher for long-term investment.
Supply cannot keep up with demand
Low inventory in the market remains a challenge. While housing affordability improves, few listings are available in the market as the mobility of potential sellers is held back by the pandemic.
A market is considered balanced when it has 5 or 6 months of inventory. Inventory of single-family homes and townhomes in early 2020 was already only 2.5 months across the D-FW metroplex and fell to 2.1 by May 2020. The market was tightest for homes priced below $300,000, falling from 2.1 months of inventory to 1.5 months during that same period. Inventory was also generally lower in top school districts, regardless of price. Most indications are that inventory has fallen further as the pandemic dragged on.
– end –
Contact:
Steven McCord
(469) 298-9704
steven.mccord@spatiallaser.com
Reference articles by Spatial Laser:
Affordability
Inventory
100,000 more Dallas-Fort Worth homes just became affordable
According to research by Spatial Laser, Inc.
As mortgage interest rates fell, 73,000 more homes became affordable in 2020 to households making $50,000 per year. Of these, 42% of the newly affordable houses are in areas of the Metroplex with strong schools and access to jobs. Also in 2020, for households earning $70,000 per year, 106,000 more houses became affordable. Of these, 73%, or nearly three-quarters, are in areas with strong schools. “The decline in mortgage rates has opened up opportunities to more home buyers, resulting in strong demand and low inventory,” said Steven McCord, Co-Founder of Spatial Laser, Inc., a Plano-based based real estate technology, or “proptech” firm.
Mortgage rates at record lows
The 30-year fixed mortgage rate, the most popular loan product, fell to historic lows at least 14 times in 2020, according to Freddie Mac. Mortgage rates are lower than they have been since the government started tracking them in 1971.
73,000 homes became affordable to households earning $50,000 per year
Lower rates result in lower monthly payments. Thanks to these lower payments, more houses are affordable now compared to just one year ago. In 2020, 73,000 more homes in the D-FW area became affordable to households making $50,000 per year. Similarly, in 2019, 67,000 new homes became affordable.
Many of these newly affordable homes are concentrated in Garland, Mesquite, Irving, Grand Prairie, and the city of Fort Worth. Many of the homes are in areas with strong fundamentals, with 42% of the total, or 33,000 houses, located in areas that score a 6 out of 10 or higher on the Locate Alpha Homeowner Index, a combined index developed by Spatial Laser. This index is heavily weighted on school performance, crime and access to amenities. Some homes do even better, with 14% of the total in areas scoring 7 out of 10 or above.
There are opportunities for investors too. 77% of the newly affordable homes were in areas scoring a 6 out of 10 or higher on the Locate Alpha Long-Term Investor Score, which is heavily weighted on rentability: access to jobs and to generate cashflow for the investor.
106,000 more houses became affordable to households earning $70,000 per year
Similarly, for households earning $70,000 per year, 106,000 more houses in Dallas-Fort Worth became affordable 2020, thanks to lower mortgage payments.
For those buying homes on the Dallas side of the Metroplex, newly affordable opportunities entered the scene in areas such as Little Elm and Carrollton. On the Fort Worth side, they appeared in areas including Saginaw and Arlington. Many of the homes were in neighborhoods with strong fundamentals, with 72% of the houses, or 76,000 units, located in areas scoring 6 out of 10 or above on the Locate Alpha Homeowner Index, and 43% scoring a 7/10 or above.
For investors, 54% of the homes scored a 6/10 or higher for long-term investment.
Supply cannot keep up with demand
Low inventory in the market remains a challenge. While housing affordability improves, few listings are available in the market as the mobility of potential sellers is held back by the pandemic.
A market is considered balanced when it has 5 or 6 months of inventory. Inventory of single-family homes and townhomes in early 2020 was already only 2.5 months across the D-FW metroplex and fell to 2.1 by May 2020. The market was tightest for homes priced below $300,000, falling from 2.1 months of inventory to 1.5 months during that same period. Inventory was also generally lower in top school districts, regardless of price. Most indications are that inventory has fallen further as the pandemic dragged on.
– end –
Contact:
Steven McCord
(469) 298-9704
steven.mccord@spatiallaser.com
Reference articles by Spatial Laser:
Affordability
Inventory
