Texas Housing Market Update: Why Inventory Is Driving Big Shifts in 2025

The Texas housing market is changing—fast. And if you're thinking about buying or selling this year, understanding what’s happening beneath the surface is key to making a smart move.

Not long ago, during the post-pandemic rush, Texas couldn't build homes quickly enough to keep up with demand. But now? Inventory has flipped. There are too many homes on the market in many areas, and that shift is starting to ripple through pricing, builder incentives, and even rent trends.

Here’s what that means for you.

A Surprising Turn in Supply and Demand

More homes are being listed across the state, and buyers aren’t rushing in like they used to. That increase in inventory is pushing sellers to lower their prices and forcing builders to get more aggressive with their incentives. In fact, Texas is now one of the top states—alongside Florida—where builders are offering the biggest perks to get deals across the finish line.

Median list prices across the state are holding steady around $379K, while new listings are coming in close behind at $375K. That points to a slight stabilisation, but we’re also seeing an important trend: homes that are priced too high for their condition are the ones dropping in price and sitting longer.

Buyers Are Active—But They’re Picky

While it may not feel like a frenzy, homes are selling—especially the ones that are well-maintained, well-priced, and marketed well. Median days on market have dropped significantly since January, from 91 days down to 63, and homes in great condition are still moving quickly.

This is an important reminder for sellers: presentation matters. A few updates, curb appeal, and good photos can make all the difference in whether your home sells fast—or lingers and gets discounted.

And for buyers: don’t assume every home is negotiable just because inventory is up. The best properties will always get snapped up quickly, especially in the spring and summer months.

Metro Area Breakdowns

Across major metro areas like Austin, San Antonio, Houston, and Dallas, trends vary—but the general pattern is clear: more listings, more price adjustments, and rising incentives from builders trying to compete.

• Austin has seen a significant drop in home values since 2022, but it’s also showing signs of recovery. Median list prices are up to $531K, and homes are selling faster again. It may be the perfect time to “buy the dip.”

• San Antonio offers a bit more pricing stability, but over 40% of homes are seeing price drops due to overpricing or poor condition. Rent prices are also dipping slightly, giving buyers more reason to consider purchasing now.

• Houston has a massive number of homes for sale (over 29,000) and is seeing a strong shift toward a buyer’s market. Builders here are especially aggressive with their offers—making it one of the best places to look for a new construction deal.

• Dallas-Fort Worth stands out as the hottest market in Texas right now, with a strong seller advantage and the highest housing activity in the state. But it’s also one of the most overvalued, with prices sitting well above long-term fair value compared to local income levels.

Builder Trends and New Construction

Texas continues to lead the country in new home construction, with Dallas and Houston issuing more permits than anywhere else in the nation. For buyers considering new builds, this is both a blessing and a warning.

There are plenty of options and deals to be had—but not all builders are created equal. The best way to protect your investment? Avoid the mega-builders when possible, or be extra vigilant with inspections and follow-up if you go that route. New doesn’t always mean perfect, so make sure your builder is accountable and your contract protects you.

The Bottom Line for Buyers and Sellers

For buyers, it’s a season of opportunity—especially if you’re open to cosmetic updates or looking at areas with high builder activity. Shop smart, be patient, and when the right house hits the market, be ready to move quickly.

For sellers, it’s time to return to the basics: clean, stage, update, price realistically, and market well. There’s still strong demand—but only for homes that show well and are priced right.

Thinking of relocating or buying a home in Texas this year? Let's chat!

Post written by Michael Stephens from Living Local Texas.