Housing Market in Texas Hits a Decade Low Amid Prolonged Housing Slump

Texas Housing Market Sees Historic Slowdown as Sales Plummet

Austin,Texas – A palpable stillness has descended upon the Texas housing market. Across the state’s major metropolitan areas, fewer homes are changing hands, signaling a dramatic slowdown not witnessed in decades. Recent analysis indicates that prospective buyers and sellers are adopting a ‘wait-and-see’ approach, profoundly impacting home sales throughout the region.

A National Trend Intensified in Texas

Data reveals that just 28 out of every 1,000 homes in the United States were sold during the first nine months of 2025. This represents the lowest turnover rate recorded since the early 1990s. However, the impact is being felt more acutely in Texas, with cities like San Antonio, Dallas, Houston, and Fort worth experiencing even steeper declines in sales activity. The analysis leverages insights from Multiple listing services (MLS) and county records to measure this key indicator.

Cities Hit Hardest by the Sales Dip

San Antonio, previously a popular destination for out-of-state residents, has seen the most significant drop, with its home sales turnover rate falling nearly 27 percent compared to the prior year. Dallas, Houston, and Fort Worth swiftly followed, each reporting double-digit percentage declines in transaction volume. The downturn indicates a ample shift in market dynamics.

City	Sales per 1,000 Homes (2025)	Year-Over-Year Change
San Antonio	24	-26.9%
Dallas	23	-12.6%
Fort Worth	23	-10.2%
Houston	23	-13%
Austin	22	-15.9%
Virginia Beach	35	+5%

Did You Know? Virginia Beach, virginia, stands out as a national exception, witnessing a 5 percent increase in home turnover this year.

The Driving Forces Behind the Slowdown

A primary factor contributing to this slowdown is the significant disparity between current mortgage rates and those held by existing homeowners. Approximately 70 percent of U.S. homeowners have secured mortgages with interest rates below 5 percent,a stark contrast to the current average of around 6.2 percent. This financial incentive is causing many Texans to remain in their current homes rather than relinquish their favorable rates.

Furthermore,persistent affordability challenges are playing a critical role. Home prices in many Texas cities have remained near record highs, while escalating borrowing costs and property taxes continue to strain buyers’ budgets. This combination is fostering a sense of caution and prompting prospective purchasers to reassess their options.

Expert Insights on the Market Shift

“America’s housing market is characterized by caution right now,” stated Chen zhao, Head of Economics Research. “Potential buyers are increasingly withdrawing from deals due to affordability obstacles or are carefully evaluating the optimal timing for a commitment. Others have temporarily paused their search, anticipating potential decreases in prices or mortgage rates.”

New Construction Offers Limited Relief

While single-family homes are still selling at a slightly faster pace than condos or townhouses nationwide, demand has cooled across the board in Texas. Though, the state benefits from a steady stream of new constructions, providing some, yet limited, inventory.

Looking Ahead: long-Term Implications

The current slowdown could reshape the Texas housing landscape. Buyers may find more negotiating power, while sellers will likely need to adjust their expectations. The balance between supply and demand will be crucial in determining the market’s future trajectory. Understanding these trends is paramount for individuals considering entering the Texas real estate arena.

Pro Tip: For potential buyers, now might be a strategic time to explore options and negotiate favorable terms. For sellers,realistic pricing and a proactive approach to marketing are essential.

Frequently Asked Questions About the texas Housing market

• What is causing the slowdown in Texas home sales? The primary drivers are high mortgage rates,affordability issues,and existing homeowners hesitant to give up low-interest loans.
• Which cities in Texas are experiencing the largest declines in sales? San Antonio is currently facing the most significant drop, followed by Dallas, Houston, and Fort Worth.
• Is now a good time to buy a home in Texas? It depends on your individual circumstances, but buyers may have more negotiating power in the current market.
• What should sellers do to attract buyers? Sellers should consider realistic pricing and focus on effective marketing strategies.
• How does the Texas market compare to the national average? Texas is experiencing a more pronounced slowdown than the national average, although the underlying factors are similar.
• Will home prices decline in Texas? while a significant price drop isn’t predicted, increasing inventory and slowing demand could stabilize or modestly decrease prices in some areas.
• What impact does new construction have on the Texas housing market? New construction offers some relief to the limited housing supply, but demand remains a significant factor.

What are your thoughts on the current state of the Texas housing market? Do you think now is a good time to buy or sell? Share your opinions in the comments below!

What factors are contributing to the decade-low housing market conditions in Texas?

The current State of Texas Real Estate

Texas’s once-booming housing market is experiencing a significant downturn, reaching its lowest point in over a decade. Several factors are converging to create this challenging environment for both buyers and sellers. The slowdown isn’t localized; major metropolitan areas like Austin,Dallas-Fort Worth,Houston,and San Antonio are all feeling the pressure. This impacts Texas home values, property prices Texas, and overall real estate trends Texas.

key Indicators of the Slump

* Inventory Surge: After years of historically low inventory, the number of homes for sale in Texas has dramatically increased. This gives buyers more options and reduces competition,shifting the market balance. Data from the Texas Real Estate Research Center at Texas A&M University shows a 6.8-month supply of homes in October 2025, a stark contrast to the 2.5-month supply in October 2023.

* Price Reductions: Sellers are increasingly forced to lower their asking prices to attract buyers. The median home price across the state has fallen by 8.2% year-over-year as of November 2025. This is particularly noticeable in previously hot markets like Austin, where price cuts are becoming commonplace.

* Days on Market Increase: Homes are staying on the market longer. The average days on market (DOM) has risen to 72 days, compared to just 30 days a year ago. This indicates a slower pace of sales and reduced buyer urgency.

* Mortgage Rate Impact: Rising mortgage rates continue to be a major headwind. The average 30-year fixed mortgage rate currently sits at 7.8%,making homeownership less affordable for many potential buyers. This directly affects Texas housing affordability.

* Building Permits Decline: New construction is slowing down as builders respond to the weakening demand. Building permits issued for single-family homes are down 15% compared to last year, suggesting a further reduction in housing supply in the future.

Regional Variations in the Texas Housing Market

While the entire state is experiencing a slowdown, the severity varies by region.

* Austin: Once the nation’s hottest housing market, Austin has seen the most significant correction. Rapid price appreciation during the pandemic has been followed by a substantial decline. The tech industry layoffs in the area have contributed to the cooling market.

* Dallas-fort Worth: DFW remains relatively resilient compared to Austin, but is still experiencing a slowdown. strong job growth in the region is helping to support demand, but high mortgage rates are still a challenge.

* Houston: Houston’s housing market is showing signs of stabilization, but remains below peak levels. The energy sector’s performance is a key factor influencing the market’s trajectory.

* San Antonio: San Antonio is experiencing a moderate slowdown, with price reductions and increased inventory. The city’s relatively affordable housing market is attracting some buyers from other parts of the state.

factors Contributing to the Slump

Several interconnected factors are driving the current housing slump in Texas.

1. Economic Slowdown: Concerns about a potential recession are weighing on consumer confidence and impacting housing demand.
2. High Interest Rates: The Federal Reserve’s aggressive interest rate hikes to combat inflation have substantially increased mortgage rates, making homeownership less affordable.
3. Overbuilding: The surge in construction activity during the pandemic led to an oversupply of homes in some areas, exacerbating the current slowdown.
4. Political Climate: recent political events, such as the controversial actions by governor Abbott ordering the arrest of Democratic lawmakers (as reported by Revista Forum on August 5, 2025), have created uncertainty and possibly impacted investor confidence in the state. While the direct link to the housing market is complex, such events can contribute to a broader sense of instability.
5. Migration Patterns: The dramatic influx of residents Texas experienced during the pandemic has slowed,reducing demand.

impact on Buyers and Sellers

The current market conditions present both challenges and opportunities for buyers and sellers.

For Buyers:

* Increased Negotiating Power: Buyers have more leverage to negotiate prices and terms.

* Wider Selection: A larger inventory of homes provides more choices.

* Reduced Competition: Fewer bidding wars mean less pressure to overpay.

* Longer Due Diligence Periods: Buyers have more time to conduct inspections and secure financing.

For Sellers:

* Need for Realistic pricing: Sellers must price their homes competitively to attract buyers.

* Potential for Price Reductions: Be prepared to lower the asking price if the home doesn’t sell quickly.

* importance of Curb Appeal: making a good first impression is crucial in a slower market.