Texas housing markets in 2025 have undergone a transformation that reshaped buying and selling dynamics.
Price shifts, interest rate movements, and a surge in inventory created new conditions for both homeowners and investors. Key factors, including mortgage costs, affordability concerns, and regional differences, set the foundation for an evolving market cycle that is shifting in favor of buyers over sellers. Home sales showed almost no improvement compared to the prior year, with just a 0.1% uptick. Median prices slipped by 1.4%, settling near $340,000, marking a cooling phase after strong growth cycles of previous years. Inventory levels increased by almost 30% compared to 2024, leading to more homes sitting unsold for longer periods. Days on market climbed by 23.1%, creating challenges for sellers who must now wait extended periods before closing. Price cuts became a common tool, with reductions climbing 16.2% as sellers adjusted to a changing pool of buyers. Austin continued its market correction, dropping 3.0% in its home price index and remaining 17% lower than the 2022 peak. Dallas-Fort Worth extended its slide, marking three straight months of price declines. Houston offered more stability, rising by 2.0% compared to the prior year and ranking as the strongest metro performer.
Shifting to a Buyer’s Market
As the sun sets on desert hills and city towers, affordability questions loom, where growth meets the limits of income and supply. Higher supply stripped sellers of negotiating power.
More homes available meant buyers gained significant leverage during deal-making. New listings often exceeded closed sales, leaving excess inventory in circulation. Sellers attempted to attract buyers through incentives like closing cost coverage, appliance packages, or flexible move-in dates.
Indicators of buyer strength:
- Excess inventory relative to closed sales
- Increased seller concessions
- Rising use of incentives to generate offers
San Antonio posted a slight 0.4% decline, but high levels of seller concessions became a defining element of its activity.
Regional highlights:
- Austin: -3.0% home price index, 17% below 2022 peak
- Dallas-Fort Worth: three months of steady declines
- Houston: +2.0% year-over-year growth
- San Antonio: -0.4% with elevated concessions
Outlook for 2026
Market conditions in Texas are shaping up for a period of slower momentum compared to national averages. Buyers, sellers, and investors will need to adapt to persistent affordability constraints, fluctuating demand across regions, and cautious building activity.
Price growth will remain uneven across metros, while inventory trends are likely to reinforce both challenges and opportunities.
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