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A booming business environment, authentic Texan identity and vibrant arts scene have made Fort Worth one of the most sought-after housing markets in Texas.
In fact, the city has grown 25% since 2010.
Joel Plotkin
Marc Croker
The population influx coupled with an affordable cost of living relative to national averages has created an increasingly competitive market. Hopeful homebuyers may also be feeling the whiplash of the last three years — from historically low mortgage rates to rapidly rising rates and from bidding wars to sellers pulling home listings.
However, there are reasons for optimism in the year ahead. Even the experts don’t hold a crystal ball to the ins and outs of the homebuying market, but these are three broader trends Fort Worth buyers can anticipate in the year ahead:
- Limited housing supply: Low inventory and homes selling at a faster rate have created a challenging market for the past several years. The reality is this might not change any time soon given current market dynamics. Additionally, Bank of America’s latest Homebuyer Insights Report found that 70% of homeowners ages 45 to 76 plan to or have retired in the home they already own. For consideration, roughly 28% of Fort Worth residents are over 45. With more people staying in their homes while fewer are selling them, national active home listings saw a 53% decrease between July 2016 and December 2022 since Realtor.com began tracking this data.
- A steady start to the year: In the last several weeks of 2022, rates consistently dropped after reaching a peak of 7.08% in November 2022, and currently hover around 6.3% in Fort Worth. The biggest mistake potential homebuyers can make is trying to time the market. Instead, consider your personal timeline and when you’re financially ready to buy.
- Buyers hold more decision-making power: At the height of the homebuying frenzy, there were stories of homebuyers overbidding by enormous sums or making numerous concessions. As the environment between buyers and sellers equalizes, buyers will have more time to think and negotiate – making the shopping experience more manageable. For local perspective, a home spent an average of 51 days on the market in December 2022, as compared to 16 days that summer.
Homebuying Strategies for 2023
The challenges and opportunities the homebuying environment presents will require some careful planning for those looking to buy. Whether 2023 is the year you become a homeowner or purchase your second home, here are a few strategies to get you started:
- Take advantage of digital tools: For more convenience and control over home financing, online resources can guide you through the mortgage process from start to finish and prevent any delays in the process, whether it’s checking the status of your loan or submitting required documentation electronically. They’ll even provide you with a to-do list of outstanding tasks and status and details of a loan application.
- Show sellers you can meet financial obligations: Whether you’re getting additional down payment assistance or earning a higher income, putting down a larger down payment could lower your mortgage rate. Anytime you can showcase to the seller that you’re in good financial standing, you should do so, as it’ll make your offer stronger.
- Pay discount points on your mortgage: Mortgage points, also known as discount points, are fees you pay your lender at closing for a reduced interest rate on your loan. While this might not be the right strategy for everyone, paying discount points on your mortgage could offer potential savings over the course of the loan. In general, the longer you plan to own the home, the more you’ll save using points. Also determine whether you have the cash available to buy points up front.
- Research assistance in upfront costs: Even if a monthly mortgage payment fits into your larger financial picture, many homebuyers still struggle with saving for the down payment and closing costs. Recognizing cash reserves are often the biggest barrier to homeownership, Bank of America offers up to $17,500 in down payment and closing cost assistance when used together - no repayment necessary. Additionally, the Bank of America Down Payment Center helps homebuyers find state and local down payment and closing cost assistance programs in their area and the Bank of America Real Estate Center® identifies down payment and closing cost grant-eligible properties for sale across the country.
- Take your time: Finally, don’t rush into it. Take time to improve your credit score, research lender options, and understand what you can comfortably afford before jumping in.
While buying a home today may require a bit more patience and persistence, taking the time to prepare for what’s ahead, going in with the right mindset and taking advantage of available resources can put you well on the path to your next home!
Marc Croker is vice president/lending market leader of the Central Southeast Division of Bank of America Fort Worth.