Texas Real Estate market trends 2025 for Investors

Current Market Trends in Texas Real Estate (2025)

The Texas real estate market in 2025 is characterized by a mix of stabilizing home prices, increasing inventory, shifting sales dynamics, and evolving regional trends. Below is a detailed summary of the key market trends shaping Texas real estate this year:

1. Home Prices Slightly Declining or Stabilizing

The average home value in Texas is approximately $303,321, reflecting a slight year-over-year decrease of about 0.7% to 0.76% depending on the source. After a 40 percent increase in median home prices since 2020, the market has taken a breather.

2. Increasing Housing Inventory and More Balanced Market

Active listings increased by over 15% year-over-year in many areas, giving buyers more options and slightly reducing the urgency compared to the intense competition seen in prior years.

At the same time, new construction is ticking up. New construction permits and housing are increasing, particularly in the major metro areas. In some areas, new construction activity jumped by 20% growth, which may help ease supply constraints.

Although, with the new tariffs imposed to Canada and other countries, the construction supplies costs may affect new projects. New homes actually cost about 45% more than they would have if they were built a few years ago.

3. Sales Activity and Regional Variations

Total home sales have declined slightly, with a 6.2% drop in homes sold year-over-year reported early in 2025. However, sales activity has shown seasonal strength with increases in some months like September and October 2024, especially in San Antonio (17%), Houston (12%), and Austin (7%). Dallas saw a slight sales decline during this period.

Days on market (DOM) have generally increased, indicating a slower pace of sales. In the first quarter of 2025, homes in Texas spent an average of 72 days on the market, which is a one-week increase compared to the same period in 2024. However, some metros like Houston and Austin saw slight decreases in DOM more recently. In the first quarter of 2025, homes in Austin, Texas, spent an average of 44 days on the market. This marks a notable improvement compared to the same period in 2024.

4. Interest Rates and Financing Environment

As of the second quarter of 2025, mortgage interest rates in the United States remain relatively high, with the 30 year fixed rate mortgage averaging between 6.76% and 6.92%. This range reflects data from multiple sources, including Freddie Mac, Mortgage Bankers Association and others.

Several factors contribute to these sustained high rates:

Federal Reserve Policy: The Federal Reserve has maintained a cautious stance on rate cuts, aiming to balance inflation control with economic growth.
Economic Indicators: Persistent inflation and strong employment figures have influenced bond markets, keeping yields and consequently mortgage rates elevated.
Market Volatility: Geopolitical tensions and trade policies have introduced uncertainties, affecting investor confidence and contributing to rate fluctuations.

Looking ahead, forecasts suggest that mortgage rates may gradually decline towards the end of 2025, potentially reaching around 6.2%, contingent upon economic conditions and Federal Reserve actions.

5. Population Growth and Suburban Expansion

Texas continues to experience strong population growth, driven by domestic migration and job opportunities, particularly in tech, healthcare, and energy sectors. Suburban and secondary cities such as Frisco, New Braunfels, McKinney, and Round Rock are among the fastest-growing, benefiting from affordability and family-friendly amenities.

This trend supports demand for both single-family homes and multifamily rental properties in these expanding areas.

6. Rental Market Strength

The rental market remains robust, with about 38% of Texas households renting. Vacancy rates are low, and rental demand is strong, especially in urban and suburban growth corridors. Multifamily housing continues to attract investor interest due to steady cash flow and demographic trends favoring renting.

Trend	Summary
Home Prices	Slight decline or stabilization; average around $303,000; modest increases expected in 2025
Inventory	Rising inventory; months of supply up to 72 days in average; more balanced market conditions
Sales Activity	Slight overall decline; regional variation with some metros showing sales growth
Days on Market	Increased overall, though some metros see decreases
Interest Rates	Moderate increase to 6.76% and 6.92% for 30-year fixed mortgages, impacting affordability
Population & Migration	Continued strong growth, especially in suburbs and secondary cities
Rental Market	Strong demand and low vacancies.
New Construction	Increased permits and housing starts, especially in major metros, are helping ease supply constraints. However, this progress could be impacted by new tariffs on construction related imports.

Conclusion

The Texas real estate market in 2025 is transitioning toward greater balance after several years of rapid price appreciation and tight inventory. While home prices have slightly declined or stabilized, rising inventory and new construction are providing buyers with more options. Regional disparities remain, with some cities experiencing stronger sales and price growth than others.

The moderate increases in mortgage rates have affected the demand but have not drastically cooled the market. Population growth and suburban expansion continue to show long term demand, while the rental market remains a strong segment for investors.

Overall, Texas remains a dynamic and attractive real estate market, though investors and buyers should carefully consider local conditions and financing costs in their decision-making.

If you are looking for properties to invest in the great state of Texas, Sell2Rent is here to help. We specialize in Leaseback opportunities. Offering great off market properties with tenants in place and prepaid rent.

Join our investor community here: