DFW home sales fell in June with the diminishing supply of affordable homes. Home prices are still rising in many DFW submarkets, but sales are cooling in the more expensive submarkets. NTREIS stats reflect a sales decline of roughly 3-4 percent in June in the Dallas-Fort Worth area compared to the same month last year. The same held true in Denton County where sales also fell 3-4% compared to last year. The city of Denton bucked the trend in June with a 30 percent sales gain in June. How? In a word, it was all about AFFORDABILITY.

The average price of a home sold in the city of Denton was $276, 820, a decline of roughly 1 percent from last year. The median price of a home sold in Denton posted at $257,750 in June, a rise of 5.4% compared to the same time a year ago. The city of Denton closed about 30% more new homes in June, and the rise in resale closings was almost as good. It wasn’t all good news for Denton unfortunately. Pending sales numbers suggest that the city of Denton sales activity will cool as well. Pending sales numbers for Denton are down double digits for June. This would indicate that even Denton is running out of affordable home inventory.

The Dallas-Fort Worth real estate market continues to rack up healthy sales numbers for new homes, but the resale segment of the market (the bulk of actual sales) is stagnating due to a lack of affordable supply. Builders are still ramping up construction of homes, and they are tempering their expectations by lowering average price points to match buyer demand. Unfortunately many affordable resale homes that should be hitting the market are still tied up by speculators and investors. This is a feature, not a bug, of policy responses coming out of the Great Recession.

Leasing activity in the DFW area was up 11 percent in June with the average price of a DFW rental posting at $1856. That’s a 2 percent increase in from the same time a year ago. The abundant supply of DFW apartment projects continues to put a lit on rent growth in the Dallas-Fort Worth Area. Median rents were unchanged from the same time a year ago.

The latest numbers on DFW housing confirm that the bulk of demand remains with affordable homes where supply is still very thin. This is a problem throughout the DFW area, and it’s a big reason why the Denton real estate market has been doing so well. The city of Denton is growing from a much lower average price point.

Mortgage rates have certainly cooled during the past two months as demand for purchase applications hit a wall once rates climbed above 4.5%. This should not be surprising considering the continued rise in home prices. People buy payments, not just prices. A rubber band stretches only so far before it breaks.

REAL DFW sales numbers have been mis-reported in the local media. This has apparently been the case for several years. Yours truly decided to fact check the press releases from NTREIS and the Dallas Morning News real estate editor Steve Brown who apparently just regurgitates them as gospel. As it turns out the press releases (compiled by the Real Estate Center at Texas A&M) have been statistically OVER-estimating the DFW sales numbers for some time.

The flattening yield curve continues to flash warning signs regarding future growth. Nothing in terms of budget deficits or debts has been resolved, and stagflation is readily apparent throughout the economy.  The latest CPI numbers show that wage growth remains well behind real inflation. The winds of change are picking up speed. Buyers and sellers should take note. The Federal Reserve just came up with a new alternative measure of the yield curve. That probably has something to do with the fact that the real yield curve indicates the Fed is driving the U.S. economy into a ditch.