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John Burns surveyed over 1,200 homeowners and renters in September, revealing that 47% of consumers would consider purchasing a new home if mortgage rates fell below 5.5%. As of mid-October, the average 30-year fixed mortgage rate stands at 6.44%. We expect that as rates decline, both home sales and relocations will improve.
Wage Growth: According to the Bureau of Labor Statistics, real average hourly earnings increased by 1.8% year-over-year in September 2024, with nominal wages (not adjusted for inflation) rising by approximately 4.0%. Though wage growth has moderated, it remains positive, which has an impact on rent growth.
DFW Job Growth: According to an article published by the Dallas Morning News on October 14th, 2024, job growth has slowed compared to prior years. DFW added 58,700 net new jobs for the 12 months ending in August. 104,000 new jobs were added the previous year. DFW needs to maintain at least 100,000 new jobs annually to support its new home growth rate of over 50,000 annual starts. According to a strategist that tracks Texas’ new home industry, a slowdown in the tech sector has led to fewer relocations over the past year but they remain optimistic that as rates come down, job growth will climb.
Housing Supply: Finished vacant housing inventory moved higher in Q3, reaching a cycle high of 10,260. That represents YOY growth of more than 2,000 units, a 24.7% increase. The number of model homes increased from 1,103 to 1,284. This indicates the number of new communities in the region is growing. Supply levels are currently at 2.3 months, which is considered to be within normal market conditions. Months of supply for existing homes is currently above 4 months and 6 months represents a balanced market.
Common Ground Capital Portfolio Rent Growth: Year-over-year rent growth in our portfolio averaged 2.98%. Our highest rent growth occurred in the 75044 zip code (Garland, TX) in the amount of 4.6%. Please feel free to reach out to us and learn more about specific neighborhoods.
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