Denton County home sales followed the trend in the DFW area during February, roughly unchanged from the same sales volume a year ago. The average price of a Denton  County home rose almost 5 percent year-over-year to just over $341,000. The median price of a Denton County home rose 7.5% to $304,990. The average price of a new Denton County home rose 9.6 % in February to $432,625. Resale price gains were more muted in February, rising only 4.0 percent compared to last year.

Pending home sales in both Denton County and the greater DFW area were softer compared to February of last year, down about 8 percent. The supply of available homes on the market in Denton County rose 13 percent year-over-year, with 2.0 months of supply (a 5.3% increase). Days on market increased to 50 days, or roughly an additional week compared to the 44 days seen at this time last year.

With rising home prices in both Denton County and the greater DFW area, the recent rise in mortgage rates has posed a new challenge for would be home buyers. The current tug of war between the bond market and the economy suggests the Federal Reserve is aware of the slippery slope they have created for themselves. This is probably a fitting scenario considering the recent revelations surrounding potential collusion between the Fed and our TBTF banks.

While many pundits were screaming about a breakout in yields of 3 percent or higher, the lack of follow-through indicates what I have been suggesting all along, namely that the economy isn’t strong enough to sustain higher interest rates no matter what kind of horse manure the Fed is selling. Mortgage purchase applications have already flatlined with the interest rate on the 30-year fixed rate mortgage at 4.5%. Mortgage refinance applications have all but evaporated.

This cooling of the housing market has occurred with the yield on the 10-year Treasury bond still under 3.0 percent. This morning the 10-year was sitting at roughly 2.89 percent. If the Fed wants to get 3 or 4 more rate hikes in this year, they better get cooking because that tax-cut stimulus they were crowing about has already been squandered on record corporate stock buybacks and balance sheet gimmickry. There will likely be ZERO stimulus to real GDP growth by the end of the year, particularly if we get a stock market correction.

For the time being, the DFW real estate market is holding up pretty well. That being said, things are certainly not as rosy as the false picture painted by the Dallas Morning News and other worthless media parrots who just regurgitate the latest corporate press releases and spin. I’m still waiting for the local paper or news stations to run a story about the recent downward revisions to DFW job growth. That’s an unfortunate bit of reality that will likely get swept under the rug for the sake of higher advertising revenue I’m afraid.