How Rising Interest Rates Are Impacting Buyers in Dallas

By Steven J. Thomas | Refind Realty

Hi, I’m Steven Thomas. If you’ve been following the Dallas real estate market, you’ve probably noticed that mortgage interest rates have been climbing. Whether you’re a first-time buyer or looking to move up, those rate increases can change a lot about your home search.

Let’s talk about what that means for buyers in Dallas right now and how you can still find opportunity in today’s market.

What’s Happening With Interest Rates in 2025?

Mortgage rates started rising in 2022 and have remained elevated throughout 2023 and 2024. In early 2025, we’re still seeing 30-year fixed rates hovering around 6.5% to 7%, depending on the day and the lender.

This is a big change from the sub-4% rates we saw just a few years ago. But it doesn’t mean homeownership is out of reach. It just means the math looks different, and buyers need to be more strategic.

How Higher Rates Affect Your Buying Power

When rates go up, your monthly payment goes up too, even if the home price stays the same. Here’s an example:

• At 4.5% interest on a $400,000 home, your principal and interest might be around $2,027/month.

• At 7% interest, that jumps to about $2,661/month.

That’s a $634/month difference.

Over time, that adds up. And for many buyers, it means they qualify for less than they would have with lower rates.

Are Dallas Home Prices Dropping Because of Rates?

Prices have leveled out in some areas, but Dallas remains a high-demand market. Inventory is still tight, and demand continues from buyers relocating from other states.

While we’re not seeing the bidding wars of 2021, sellers who price correctly are still getting strong offers.

Builders, however, are offering more incentives than ever to attract buyers. That includes:

• Rate buy-downs

• Covered closing costs

• Design upgrades

• Extended rate locks

Explore current New Construction Homes in Dallas-Fort Worth for some of the best value in today’s market.

Tips for Buying Smart in a High-Rate Market

1. Get Pre-Approved Early

Rates can fluctuate week to week. Lock in your rate with a lender who offers float-down options. Start the process here: Get Pre-Approved

2. Consider New Construction

Many builders are partnering with lenders to offer below-market rates or free rate locks for up to 12 months. Take advantage of it.

You may also qualify for my New Construction Rebate Program which gives you cash back at closing.

3. Work with a Pro Who Knows the Numbers

I help buyers break down total monthly costs, not just list price. We’ll look at taxes, insurance, HOA, and estimated rate to make sure your payment fits your comfort zone.

How Long Will Rates Stay This High?

No one can predict interest rates with certainty, but most experts agree rates are likely to stay between 6% and 7% for much of 2025.

Waiting for rates to drop might mean paying more for the home later. Timing the market rarely works out perfectly. If you find a home that fits your needs and budget, it’s usually smart to move forward.

You can always refinance later if rates drop.

FAQs: Interest Rates & Buying in Dallas

Are rising rates pricing buyers out of the Dallas market?
Some buyers are adjusting their price range, but many are still active. Builders and lenders are offering ways to offset rate increases.

Should I wait to buy until rates go down?
Not necessarily. Home prices may rise in the future, and you could miss out on builder incentives or appreciation.

Can I negotiate with sellers in this market?
Yes. There’s more room to negotiate now, especially with motivated sellers or builders.

How can I lower my interest rate?
Look into rate buy-downs, lender credits, or builder partnerships. I can connect you with lenders offering competitive programs.

What’s the best way to stay updated on mortgage trends?
Work with a local agent and lender team that monitors the market weekly. And download my app for real-time updates.

Final Thoughts

Rising rates have changed the game, but not the goal. You can still find a great home in Dallas. It just takes the right information, tools, and strategy.

Let’s talk through your goals and create a plan that works in today’s market.

Download the Lone Star App here: https://lonestarliving.hsidx.com/@sthomas

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