During the height of the pandemic, thousands of people packed up and moved out of Dallas. According to a new report from the U.S. Census Bureau released last week, the city lost a concerning 14,777 people between 2020 and 2021.
It’s long been suspected that Dallas was losing population steam in the Dallas-Fort Worth metropolitan statistical area. The county lost almost 25,000 people during this same time period, but we didn’t have a city-by-city breakdown. Now we do. The new report breaks down just how many people have left Dallas-proper and which cities in North Texas are actually growing.
Dallas grew by 8.9 percent between 2010 and 2020 — or about 100,000 residents. But that still paled in comparison to surrounding counties, such as Tarrant County (16.7 percent), Collin County (36.1 percent), Denton County (36.8 percent), Kaufman County (40.6 percent), and Rockwall County (37.6 percent). Now, that trend is upside down: Dallas is losing people.
Between 2020 and 2021, Fort Worth grew by 12,916, while Frisco, Denton, and McKinney grew by 7,933; 5,844; and 5,568, respectively. Little Elm (51,042) and Burleson (51,618) passed the 50,000 population mark between 2020 and 2021, and Rockwall County led the nation in housing stock growth, with an increase of 6.5 percent between July 1, 2020, and July 1, 2021.
This growth likely provides some insight into why Dallas’ population actually shrank. While a report on housing affordability from the Texas Real Estate Research Center at Texas A&M University doesn’t break down the numbers by region, it does provide some insight into how hard it is to purchase a home in Texas.
Homes cost more, and mortgage interest rates are also rising, which means first-time buyers are increasingly priced out of the Dallas market. The median family income in Texas grew by about 5.5 percent between 2020 and 2021. The median home price grew by 5.5 percent in the first quarter of 2020 and by 17.2 percent the first quarter of 2021, meaning home prices outpaced income growth.
“As mortgage interest rates increase, the total monthly mortgage payment also increases,” says Dr. Clare Losey, an assistant research economist for TRERC. “This increases the required income to qualify for a mortgage loan. In other words, as mortgage interest rates increase, purchasing power declines, and households must earn more money to purchase the same-priced home.”
In the first quarter of 2022, the 30-year fixed rate mortgage was somewhere in the neighborhood of 3 percent. By May 19, the rate was about 5.25 percent, which means the required income to qualify for a mortgage increased by more than $10,000, even for repeat buyers.
Losey says that only a third of Texas renters (the mostly likely group to become first-time homebuyers) could afford that.
The median home price in Dallas County last April was $370,000, according to the MetroTex Association of Realtors, and there were only 2,067 active listings in the county. Economists generally say that six months of housing inventory is the sign of a balanced market—Dallas County had 0.9 months.
Denton, Rockwall, Tarrant, and Collin counties all reported similar or higher median home prices and inventory, but the difference is in what you get for that median price. A quick perusal of Realtor.com on June 1 showed no current listings at the $370,000 point in Dallas — but plenty (albeit somewhere in the 1,200-to-2,400-square-foot range) in suburbs and exurbs like Forney, Little Elm, Garland, and Grand Prairie.
By comparison, for the $550,000 median home price in Collin County, there were 36 homes with square footage of up to 3,600.
Rent is also higher in Dallas, according to Rentcafe, with the average rent for a studio apartment hitting in the neighborhood of $1,474, compared to $1,356 in Fort Worth. According to the National Low Income Housing Coalition 2021 Out of Reach report, a renter would need to make $26 an hour to afford the average two-bedroom apartment in the Dallas metro area, while they’d need just shy of $24 to afford the same apartment in the Fort Worth/Arlington MSA.
This week, Fortune reported that analysts from CoreLogic found that 69.79 percent of U.S. housing markets are overvalued—including Dallas-Fort Worth (Moody’s Analytics has the region overvalued by about 33 percent). But that doesn’t necessarily mean relief—the same analysis found a “very low” chance that home prices in the region will drop anytime soon.
You also have to figure in the pandemic-related boom that drove some buyers psychologically, too, when discussing housing prices during the 2020-2021 time frame. In August 2021, I had a conversation with Briggs Freeman Sotheby’s International president Russ Anderson, who said that homebuyers were definitely looking for specific things after spending months at home during shelter-in-place, and space was one of them.
Small annoyances about homes became big annoyances. What was cozy pre-pandemic became claustrophobic, and that drove what Anderson said was the most common refrain realtors heard during that 2020-2021 time frame—”the desire for bigger homes, the push to get as big a home as possible.”
“I do believe that for the next decade, people will be looking at different things,” he says. “People will be looking for more yard. People will be looking for more at-home offices. People will be looking for places where they can create independence in their homes.”
And where will they get the most of all of that? Probably not Dallas.