Over the past few years, the price of an entry level home has increased quite a bit in Dallas and Fort Worth. This is because we have a lack of housing, a lack of new homes, and a lot more people coming into the area.
But how much have the prices gone up exactly? Let’s take a look at an entry-level home and compare what it would have cost two years ago to what it would cost now.
the increase
In 2020, an entry-level home in the DFW metroplex would cost around $300,000 and the mortgage (principle and interest only) would cost around $1,138 each month.
Over the last two years, home prices have gone up 20% and interest rates have increased to around 5.5%. That is an insane amount of growth in just two years. Historically, home prices only go up about 4% every year.
With the 20% increase in price, that same entry-level home now costs $360,000 and the monthly mortgage now costs around $1839 each month. That’s a $700 increase in the monthly payment.
Throw in other factors such as the increase in taxes and insurance for the property and you will easily be looking at $2000+ for a monthly payment.
will prices come back down?
Because of this very rapid increase, many people are saying the housing market has to come back down some time soon.
If we look at the housing market throughout history, houses have only lost value significantly one time. This was in 2008 when everything crashed.
Even in the 80s, when interest rates reached up to 17%, houses never lost value.
We can speculate all day long as to what will happen, but the truth is we simply do not know when, or even if, housing prices will ever come back down.
conclusion
Regardless of what happens in the near future with housing prices, we can certainly say that we have seen unprecedented growth in the past 2 years. Houses are significantly more expensive now than they were then.
If you have any questions, want to know more, or would like to buy or sell a property, don’t hesitate to call the number on our website. We would love to help you with all your real estate needs.
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