Dallas Mortgage Market Update – February 2012

According to a recent report by LendingTree, Dallas has some of the lowest mortgage rates in the United States. Housing is very affordable in the DFW area as well, and home prices seem to be stabilizing. Rates are expected to remain low for much of 2012. This is good new for home buyers entering the market, and for homeowners looking to refinance.

Dallas Mortgage Update, February 2012

Dallas mortgage rates have held steady over the last three weeks. The average rate on a 30-year fixed mortgage has been hovering below 4% for all of February. We have reports of well-qualified borrowers in the Dallas metro area locking in interest rates as low as 3.85%, for a 30-year loan. Just note that these are applicants with excellent credit and down payments of at least 10%. Still, it’s a great time to get a home loan.

According to Freddie Mac, we are now seeing the lowest rates since 1971, as far back as their records go. If that doesn’t get you excited, nothing will. “Rates are at fantastic levels,” said Keith Gumbinger, vice president of the mortgage data firm HSH.com. “[They have] moved very little now for the last couple of months.”

Snapshot of Mortgage Rates in Dallas, Texas

Let’s take a look at the data. Here are the results of our monthly sampling of Dallas mortgage lenders, which includes banks as well as credit unions. This data was compiled on February 20, 2012 at 8:00 a.m. (PST).

  • 30-year fixed: 3.65%
  • 15-year fixed: 3.05%
  • 5/1 ARM: 2.65%

Details: The Dallas mortgage rates shown above are based on well-qualified borrowers with credit scores above 720 who paid one point at closing. We used a hypothetical purchase price of $300,000 to generate these rates, whenever asked for a price. Your interest rate will vary based on your individual qualifications as a borrower, as well as the loan program you choose.

To come up with these numbers, we compiled and averaged the advertised rates from a dozen lenders in the Dallas area. We publish this data in order to give you a general sense of the mortgage rates available in Dallas. If you would like to learn more about how lenders price their loans, please refer to this article.

Home Price Trends in the DFW Area

It’s easy to get caught up in the “rate fever” that is sweeping across the country. But let’s keep our wits about us. What about the broader picture? Is now a good time to buy a home in the Dallas area? And what about refinancing? Does it always make sense to refinance your home? Sure, we have record-low mortgage rates in Dallas right now. But what else does a borrower need to know? Here are some points to consider if your are planning to buy or refinance in the near future:

From November 2010 to November 2011, home prices in the Dallas metro area dropped by 0.8%. On the surface, this might seem like a bad thing. But when you compare it to the other major metros tracked by the Case-Shiller 20-city index, it’s a modest decline. Home prices in Atlanta, for instance, fell by 11.8% during the same period. The average year-over-year change for all cities on the 20-city index was a 3.7% decline. So with a dip of only 0.8%, the Dallas housing market is more stable than much of the country. The same could be said for most cities in Texas.

More recent data actually shows appreciation in the Dallas area. Consider the home price index released by Clear Capital on February 6, 2012. Clear Capital, a real estate data firm, compiled a list of the top-performing major housing markets in the United States, primarily based on pricing trends. Dallas was #8 on the list, with a quarterly uptick of 1.3%.

Top Performing Markets
Home-price data through the end of January 2012. Source: Clear Capital

It’s interesting to note that the year-over-year data in this chart shows 4.7% appreciation, while the latest Case-Shiller reports shows a decline of 0.8%. There are differences in how they collect their data. But the real difference is in the time period. The decline in Dallas home prices reported by Case-Shiller is for the period of November 2010 to November 2011, while the Clear Capital report includes data from the end of January 2011 to the same period of 2012. In short, the Dallas housing market seems to be stronger now than it was for most of last year.

Many analysts are predicting stable and slightly rising prices in the DFW area, over the next couple of years. When you combine this relative stability with the historically low mortgage rates in Dallas, you could make a pretty good case for buying a house right now.

Report: Dallas Has Some of the Best Rates Right Now

Earlier this month, LendingTree published its monthly review of the mortgage market. They examine lending trends and data at the national, state and local level. According to their report, Dallas has some of the lowest mortgage rates in the country right now. Here’s what MarketWatch had to say about it:

MarketWatch quote about Dallas

In fact, when you look at the metro areas with the lowest rates in January 2012, it’s a who’s who of Texas cities. Here are the national rankings for the 30-year fixed mortgage category:

  1. Austin – 4.11%
  2. Houston – 4.15%
  3. Dallas / Fort Worth – 4.16%
  4. San Antonio – 4.17%
  5. Boston – 4.18%
  6. Seattle – 4.19%
  7. Washington, DC – 4.20%
  8. San Diego – 4.21%
  9. Allentown, PA – 4.21%
  10. Portland – 4.21%

Again, this is based on data compiled by LendingTree for January 2012. These numbers reflect the actual mortgage rates offered by lenders within the LendingTree network. They also reflect borrowers who paid one discount point at closing, in order to secure a lower rate. Learn more about using discount points.

Infographic: Lowest Mortgage Rates

The image above shows the results of a nationwide survey we conducted earlier this month. It shows what a borrower might need to qualify for the lowest mortgage rates. Of course, none of this is set in stone. It is based on the input we received from 27 lenders, two of which were located in the Dallas area. Learn more

Disclaimer: This Dallas mortgage market update is for the week of February 20, 2012. The information presented in this article is timely in nature. The average rates and other data contained in this market report may have changed by the time you read this article. We make no claims, assertions or guarantees about the interest rate you might receive from a lender. This will depend on your qualifications as a borrower (credit score, debt ratios, down payment, etc.), as well as the type of loan you are using. This information is provided for educational purposes only.