Dallas-Fort Worth Economic Indicators

March 18, 2020

Note: Most of the data included in this release precede the coronavirus outbreak in the U.S.

Dallas–Fort Worth economic growth continued in January. Payroll employment expanded, unemployment stayed near record lows, and the Dallas and Fort Worth business-cycle indexes rose further. Homebuilding activity soared in January, and housing market indicators point to moderate price appreciation and stable affordability in fourth quarter 2019.

Labor Market

Payroll Expansion Continues

DFW employment rose an annualized 2.0 percent in January, down from 4.6 percent in December (Chart 1). Payroll expansion was 1.7 percent in Dallas, while employment grew 2.7 percent in Fort Worth. Unemployment in Dallas and Fort Worth held steady at 3.1 percent.

Benchmarked Data Indicate Solid Job Gains in 2019

With the Bureau of Labor Statistics’ annual benchmark revisions, DFW job growth was revised up to 3.1 percent from its previous estimate of 2.6 percent in 2019 (Chart 2). In the Dallas–Plano–Irving metropolitan division, employment grew 3.3 percent last year—faster than its earlier estimate of 2.6 percent. Meanwhile, job gains in Fort Worth–Arlington were little changed and were above their long-term average pace.

Business-Cycle Indexes

Expansion in the Dallas and Fort Worth business-cycle indexes continued in January, supported in part by healthy job growth. The Dallas index rose an annualized 4.7 percent, slower than December’s rate. Growth in the Fort Worth index was solid at 4.3 percent. Year over year in January, the Dallas index rose 5.8 percent, and the Fort Worth index was up 4.2 percent (Chart 3). Growth in both indexes remained higher than their long-term averages.

Housing

Single-Family Construction Soars

Homebuilding remained active in the metroplex, buoyed by housing demand. DFW single-family housing permits climbed for the second month in a row in January, up 27.6 percent year over year, while the three-month moving average showed strong growth (Chart 4). Single-family permit issuance in 2019 trailed the 2018 total by 1.7 percent in DFW but was 2.4 percent higher in Texas. DFW single-family permit growth decelerated to 3.4 percent in 2018 after expanding 15.8 percent in 2017.

Home-Price Appreciation Continues

DFW home prices rose in fourth quarter 2019 due to solid job creation, strong housing demand and tight home inventories. Prices rose 0.7 percent in Dallas and 1.4 percent in Fort Worth, according to the Federal Housing Finance Agency’s house price purchase-only index. On a year-over-year basis, prices were up 3.5 percent in Dallas and 5.4 percent in Fort Worth, while U.S. and Texas prices increased 5.1 and 4.5 percent, respectively (Chart 5). Home-price appreciation in the metroplex has slowed from its torrid pace in 2015–17, when prices in both Dallas and Fort Worth rose by 10 percent annually.

Housing Affordability Holds Steady

Housing affordability was little changed in all five major Texas metros and the U.S. in fourth quarter 2019, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Indexes (Chart 6). Of the new and existing homes sold in the fourth quarter, 58 percent in Dallas and 61 percent in Fort Worth were affordable for the median-income family, similar to third-quarter figures. However, housing affordability in DFW has noticeably improved from the record lows seen in mid-to-late 2018, partly due to lower mortgage rates. Affordability in Dallas and Fort Worth remains below the national figure of 63.2 percent. Affordability in Dallas is the lowest among major Texas metros; affordability in Fort Worth has fallen below that of the other major Texas metros.