You’d think that rising interest rates would slow the real estate market, but that’s not the case for the Dallas Area. According to Jim Gaines, an economist at the Real Estate Center at Texas A&M University, Dallas-area pre-owned home sales are up 20 percent year-over-year.
In a conversation with Steve Brown, Gaines had this to say:
“I keep thinking it’s going to slow down, but it hasn’t so far,” said Dr. James Gaines, an economist with the Real Estate Center at Texas A&M University. “Yes, the rates are higher and the builders may be feeling it a little, but really, the rates are still very good and don’t seem to be hindering sales much.
“Also, if people expect the rates to continue to increase, they’ll buy now rather than wait.”
Still, even though rates are increasing, fellow Real Estate Center economist Mark Dotzour says Texas needs builders to step up the pace when constructing new homes:
The demand for single-family homes and condos is still outstripping supply. It will take time for home builders to staff up to higher levels of production. It will also take time before there are sufficient construction loans to finance this higher level of activity. In the meantime, inventories of homes for sale are likely to remain at breathtakingly low levels. Expect higher prices in the coming months.
So, with higher prices and higher rates on the horizon, do you think the market will slow?