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By now, everyone should know that your credit score plays a crucial role in deciding whether or not you get a home loan and how favorable the terms are to you. Dallas continues to grow, and the job market is booming.

In this article, we look at the current state of the housing market in Dallas, what it may look like in 2020, and how your credit score affects your chances of getting a home loan on good terms.  

 

 

Current State Of The Dallas Housing Market

Home values took a slight dip back in April, which many experts attribute to value decreases in the West Coast markets. The net effect of that is that housing prices decreased in the Dallas-Fort Worth area as well. While the drop in prices is relatively small, (0.1%), it points to changes coming to the housing sector.

According to Zillow, housing prices in the Dallas-Fort Worth area dropped slightly back in April, which is the first decline reported since January of 2012.

Also, the information provided by Dallas-Fort Worth real estate agents suggests a month-to-month decline in median home prices.

According to Dallas News

So far in 2019, the median sales price of single-family homes sold by agents in North Texas is up 2% from the first four months of 2018. Zillow said that in April, the “typical U.S. home is worth $226,800.” That’s less than the $243,900 value in the DFW area.

While the housing market is slowing, with the average number of days on the market at about 53 in the North Texas region, experts caution people to not panic just yet because overall, home prices are increasing.

While Zillow says the Dallas market is “cool” they also call for a 7.5% rise in the median home price in 2019, which puts the market on an upward swing.

DM Magazine says: 

The reason for that is simple. There are jobs here, and tens of thousands of people are still moving to this area looking to land those jobs. The Bureau of Labor Statistics says 102,500 new jobs were created in 2018. There are now 3.7 million people in this area going to work every day.

The jobs are here in Dallas, and Texas continues to lead the country in job creation, so the housing market, for the time being, is healthy. If this competitive market worries you’re you about not being able to afford a home, you still have the option of getting something cheaper as you move away from the downtown area.

Affordability isn’t just a problem here in the Dallas area, but throughout the major markets around the country too. Generally speaking, the further away you move from the major metro areas, the better the deals you can find.

 

Predictions For 2020

While the above data paints a conflicting picture, what can be predicted for the housing market in the Dallas Fort-Worth area next year is that the low inventory and high demand will keep the market very competitive for the next few years. 

The strong economy here is giving the real estate market a healthy boost, which should keep prices from dipping too much in 2020. Lastly, according to the experts at Zillow, they predict a gain of 4.8% in the market through the summer of 2020.

As you can see, there’s no reason to panic right now, as the market looks strong throughout the better part of next year.

credit score in dallas

 

Credit Scores & Your Home Loan

If you’re not familiar with how credit scores work, here’s a brief rundown. Credit reporting agencies determine your credit score based on a few factors, including:

  • Your credit to debt ratio
  • They type of credit you have
  • Timeliness of payments
  • If you’ve filed for bankruptcy

Credit reporting agencies look at this information and derive a number that gives lenders an idea of your creditworthiness. 

The typical FICO score breaks down like this: 30% is based on how much you owe; 35% is based on your payment history; 15% is based on the length of your credit history; 10% is based on new credit you’ve acquired, and 10% is based on the types of credit you have.

Your credit score not only tells the lender whether you’re worthy of credit or not but also the interest rate you pay. A high credit score usually means a low-interest rate, while a low score means a high-interest rate.

Lenders differ on what they consider the baseline for good credit, but in general, a score of 700 or above is deemed to be excellent and will net you the most favorable terms. Once you dip down into the 600s, lenders see you as a high risk. For some lenders, a score of 660 or below is a ‘no’ for a loan, so this is why it’s imperative you maintain a good credit rating.

 

How To Fix A Bad Score

So let’s say you want to buy a home, but your credit score won’t allow you to get a loan or will get you one on terrible terms. What can you do to fix it?

The first step is to:

Get a copy of your credit report to make sure there aren’t any errors that are dragging your score down. 

Next, the most important thing you can do to get your score moving in the right direction is to pay every bill on time. Making timely payments is the quickest way to improve your score. Remember to pay down debts quickly, which often means making more than the minimum payment each time.

As you can see, your credit score is essential to getting a home loan on good terms. And, if your score isn’t where it should be, you’re better off holding off on getting a loan until you can improve it. If you need help, contact a credit repair Dallas company to get you back on track and into the home of your dreams.