If you’re considering investing in the Texas housing market, it’s important to understand what’s happening in the area. This article will explore the overall Texas housing market trends and provide forecasts for three of Texas’ top metro areas – Dallas, San Antonio, and Houston – in 2025. Here’s a quick summary:

• Slight decline in home values in major metros: Home values in the major metro areas that saw a wild ride in 2022 and 2023—Austin, Dallas-Fort Worth, Houston, and San Antonio—might hit a gentle slope in 2024. Zillow predicts a 0.5% drop in DFW, 1.1% in Houston, and 1.7% in San Antonio. This slight decline in Texas home prices could be a welcome respite for buyers and investors who have been priced out of the market.

• Shift towards a more balanced market: Remember the days when there were up to ten offers on one home? Well, things have changed. More homes are up for grabs today and buyers are slowly gaining some ground. As such, buyers have more negotiating power and homes are staying on the market longer. Houston, in particular, might see this trend play out noticeably in 2025.

• Continued strength in the rental market despite increased supply: There is a construction boom in places like San Antonio and Dallas. As expected, this has led to declining rents in San Antonio and stable rents in Dallas. However, there is still strong rental demand, especially for single-family rentals all across Texas. Thanks to ongoing job and population growth, that demand isn’t going anywhere in 2025. If demand continues as it is and construction slows down as expected in 2025, rents might become more stable or even rise modestly. 

This article will give you as an investor a behind the scenes look at what’s happening in the Texas housing market and some data-backed Texas real estate market predictions for 2025. We have checked out recent trends in home sales, prices and inventory across some major metro areas in Texas.

We also looked at the factors influencing the market – population, interest rates, economic indicators, building permits, and construction starts. The goal is to give you a comprehensive picture. To support these Texas housing market predictions for 2025, we’ve garnered insights and data from Zillow, Redfin, the NAR, the TRERC (Texas Real Estate Research Commission), the NAHB, among others. 

Texas Housing Market Trends & Factors Influencing Growth

With 23 Fortune 500 companies and a label as the “headquarters of headquarters”, there’s no gainsaying the fact that Texas has a strong business environment. This is set to keep driving real estate demand in the state. Before we get into the Texas housing market predictions for 2025, let’s look at each of the factors that would impact the Texas housing market in 2025 and how Texas currently ranks based on these factors.

Population growth and migration patterns

You probably didn’t know that Texas’s population is currently about half of the UK’s population and is greater than Australia’s population. As of 2024, Texas is currently home to about 30,976,000 people. It’s growing at the rate of 1.8%, making it the third fastest-growing state in the U.S.

All four of its biggest metro areas ranked on the US Census Bureau’s list of the fastest-growing metro areas last year based on numeric increases. Between 2022 and 2023, Dallas saw the biggest population gains in the U.S. It added 152,598 new residents. Houston was next with 139,789 new residents over the same period. 

San Antonio and Austin also made the list of the top 10 fastest-growing metros in the U.S. in that 12-month period. San Antonio added 48,000 new residents, while Austin added 50,000. 

Even small metro areas like Midland and College Station-Bryan recorded significant growth. To give you a little bit more context, Midland was ranked the seventh fastest-growing metro area in the country based on growth rate. This population growth is expected to put upward pressure on Texas home prices, particularly in areas like Dallas and Houston.

So what’s driving Texas’ population growth? Strong domestic and international migration. Flocks of people move here from all across the US and around the globe. Leading the charge for in-migration into Texas is Harris County, which welcomed a whopping 53,788 new residents between 2022 and 2023. This was more than all other counties in the U.S. in those 12 months. It also had the second highest gains from international migration.

And where are these people moving from? They are mostly from California, with Florida and Louisiana not far behind. Most of the newcomers from California are bringing in more than just moving boxes; they are also bringing in spending power. Californians who moved to Texas in 2021 earned an average of $74,000. 

The future is looking bright and big for Texas! With eyes set on probably hitting between 36 and 44 million by 2060, Texas is on track to outpace California. We might just see the Lone Star State taking the lead before 2050.

Employment and economic indicators

With a GDP of $2.6 trillion (0.91% of the total U.S. economy), Texas is an economic powerhouse for the U.S. Its booming economy, fueled by tech, healthcare, energy, and agriculture, is drawing in migrants daily. Job growth in the state has been robust, especially in the tech and service sectors. This economic prosperity, combined with lower costs of living, makes Texas a top choice for domestic and international migrants.

Between August and September 2024, Texas added 29,200 new jobs. This brings the total number of non-farm jobs in the state to 14.3 million. 

Year-over-year, the state added 327,400 new jobs in September. This represents an annual growth rate of 2.3%, outpacing the U.S. average by 0.7 percentage points. Major corporations like Tesla, AT&T, and Toyota have relocated to Texas, with Austin being the top destination for these relocations. In total, there were over 164 company relocations to Texas between 2020 and 2023.

In October, job growth in Texas fell by 0.6%. That is, about 6,600 people lost their jobs. This decline was felt primarily in the professional and business services sector (with 9% job loss). Trade, transportation and utilities; education and health; and construction also recorded job losses. But the oil and gas, information and financial activities sectors saw strong job growth. The unemployment rate remained steady at 4.1%. 

Also, record-high sales tax collections, reaching $5.2 billion in October 2024, indicate strong consumer spending in the state. Based on this trend, we forecast that demand will remain elevated in the Texas housing market in 2025.

Real estate development and construction trends

Despite currently elevated mortgage rates, Texas’ housing market remains resilient, with a noticeable uptick in home sales in October. Looking ahead, Texas housing market predictions for 2025 suggest continuing steady growth, although the pace will likely be slower than previous years.

According to the Federal Reserve Bank of Dallas, Texas home sales have climbed by an average of 2.2% per month from August to October 2024. But, mortgage rates are still high, which doesn’t help buyers much. Plus, finding a house isn’t that much easier, with home inventory not budging from 4.3 months since July. This is particularly true in the Dallas housing market, where home inventory remains low, at 3.5 months as of May 2024.

Bouncing back from a sluggish August, home sales across Texas got a 4.8% boost month-over-month in September 2024, bringing the tally up to 26,165 homes sold. Among the Big Four, Houston had the largest increase (11.6% or 7,150 homes sold), followed by the Dallas housing market (4.6% or 7,202 homes sold), and Austin (2.6% or 2,331 homes sold). The San Antonio housing market, however, saw a decrease of 10.3% month-over-month or 2,532 homes sold. 

Listings dipped by nearly 500 homes statewide, a slight slide of 1.1% from August’s figures. And while July’s Hurricane Beryl sent Houston’s numbers tumbling, they’ve managed a comeback since August. In September, San Antonio saw new listings increase by 2% month-over-month (4,104 new listings), followed by Austin at 1.2% (3,587). Houston and Dallas saw new listing counts decrease by 4% each, with 13,412 and 11,002 new listings, respectively. 

In September, we saw a small decrease in building permits, down 1.2%. All the big four metros had a downward trend in building permits except San Antonio which inched up by 1.2%. Permits in Dallas fell by 5.4%, Austin had a 3.4% decrease, and Houston saw a 1.2% decline in the number of building permits. 

Single-family homes felt the chill too, reversing their upward climb since July with a 2.7% decrease. Dallas felt the sharpest sting, with single-family starts falling by 8.8%, followed by Houston at 3.7%, and Austin at 1.6%. Meanwhile, single-family starts increased by 4.1% in San Antonio.

Looking at the big picture, the third quarter of 2024 has seen an 11% year-over-year growth in new home builds across Texas—the first annual growth we’ve seen since 2021. Together, Dallas, Houston, Austin, and San Antonio added over 61,400 new residential construction permits from Q1 to Q3 2024. 

Houston claimed the top spot for new home construction activity with over 30,545 permits. Harris County alone contributed nearly half of these. While Dallas may have seen a slight decrease in new home construction, it still has the highest amount of higher-priced residential construction (homes over the $500k mark), boasting 3,465 plush residences out of the total 18,650 new permits for higher-priced residences.

Texas home prices are rising slowly too. The median home price in Texas increased up by 0.9% month-over-month in September, according to the TRERC, from $334,836 to $337,698. While San Antonio and Houston home prices grew by 2.9% and 1.3% respectively, Austin and Dallas saw decreases of 1.6% and 0.1% respectively.

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With mortgage rates taking a dip in August – the 30-year fixed falling gracefully to 6.5% – we’re all watching to see if this will spark a flurry of buyers. However, even if mortgage rates fall below 6%, the overall impact on Texas home prices is expected to be modest.

Government policies and regulations affecting real estate 

In Texas, Republican lawmakers are shaking things up with a bold move. They’re thinking about slashing through the red tape of zoning and land-use rules. The recent proposals to eliminate minimum lot sizes and density caps in residential areas means we’ll see more neighborhoods with duplexes, triplexes, and small apartment complexes. This is all in a bid to boost the number of homes available and make owning or renting a home more affordable.

Austin already gave a green light to a proposal to shrink the minimum lot size required for single-family homes from 5,750 square feet to just 1,800 square feet. With more homes packed into the city, the legislators hope to knock Austin’s sky-high prices down to earth. Plus, they’ve also approved the building of apartments next to single-family homes, especially if the builders reserve some space for affordable housing.

Nationally, an NAR settlement has brought changes to the way real estate agents get paid. Sellers are no longer required to foot the bill for buyer agents’ commission. Now, if you’re buying a home, you’ll be responsible for compensating your agent. This switch-up could really shake things up for buyers and sellers financially. 

Meanwhile, the Texas Real Estate Commission (TREC) has come up with new rules that you must be aware of if you’re a Realtor in Texas. These include a new rule on broker succession, changes to real estate inspector licensure requirements, and changes to contract forms for buyers and sellers. For example, there’s a new addendum for 1031 Exchanges, that mandates sellers and buyers to disclose their intent to use a property as a 1031 Exchange.

Dallas, Texas Housing Market Predictions 2025

Now that we’re up to speed on the current trends in the Texas real estate market as a whole, let’s look at what’s expected for Dallas—one of Texas’ fastest-growing metros. You’ll find our Dallas real estate market forecast for 2025 below.

Overview of the Dallas metro area

Between 2020 and 2023, Dallas grew to become the fourth-largest metro area in the U.S. During this time, it added almost 500,000 new residents. Currently, its population stands at 8,100,037. So you’re probably asking why this metro area is growing so fast. Well, look no further than job growth.

Dallas, also known as the “Silicon Prairie” has a strong economy, driven by banking, commerce, insurance, telecoms, tech, energy, healthcare, and more. In fact, as of 2022, it is home to about 23 Fortune 500 companies, the fourth largest concentration in the U.S. This economic strength is a significant driver of current Dallas housing market trends.

In 2022, the real GDP of the Dallas-Fort Worth-Arlington MSA grew by 5.7%. That’s more than double the average 2.1% growth rate of other U.S. metro areas. That year, Dallas’ GDP accounted for 3% of the total U.S. metropolitan GDP.

Jobs keep increasing in the Dallas-Fort Worth area. Between September 2023 and September 2024 alone, Dallas grew its job market by 2%. The highest growth was recorded in the services sector (4.8%). Mining, logging and construction saw a growth of 3.4%, and education and health services jobs increased by 3.3%.

Predictably, the population is increasing. Between 2022 and 2023 alone, 152,600 people moved to Dallas from other states and internationally. Its population currently eclipses the 8 million mark.

For any real estate market, this influx of people creates some pressure on the housing market. This is why even with increased inventory and softening home prices in some segments of the market, the Dallas real estate market is still strong. In October 2024, Redfin reported that the median sale price of a home in Dallas was $450,000, an increase of 10.3% from last year. So, while we might see some moderate price adjustments next year, Dallas’ housing market remains somewhat competitive.

Dallas Real Estate Market Forecast & Trends 2025

Dallas Property Price Trends & Predictions

• A modest price adjustment is expected

Over the past year, the Dallas-Fort Worth housing market has hit a plateau. According to Zillow, the median home value in Dallas dipped just a bit—by 0.3% in October. Looking ahead, Zillow isn’t betting on a bounce back anytime soon, anticipating a further slight dip of 0.5% by September 2025. 

Despite homes in Dallas settling into new price norms, they’re still flying off the market in just about 29 days. The housing market is still competitive. In October, while Zillow reported a slight decline, Redfin reported a double-digit price increase of 10.3%. But the fact is, the increase in available properties is giving buyers more choices and easing the frantic scramble, paving the way toward a more balanced market in 2025. 

High interest rates could have some potential buyers hitting the pause button, but a stabilization—or even a drop—in rates as forecasted for 2025 might just be the spark needed to rekindle market momentum.

Dallas keeps growing though. Major developments are going on. Texas Instruments is expanding its semiconductor projects in Sherman, new home construction is in full gear in Kaufman County, and the industrial market in Fort Worth is expanding.

In fact, the latest Emerging Trends in Real Estate report pegs Dallas as the hottest market for real estate investment and development in 2025. And this isn’t just a one-off thing. The DFW has been topping the charts in this report for the past six years. It secured the No. 1 spot in 2019 and ranked in third place in 2024. 

• Buyer confidence boosted by steady interest rates

If mortgage rates keep falling in 2025, that could boost buyer confidence in the Dallas housing market. 

But even with ups and downs in interest rates, don’t expect wild swings in Dallas’ home prices come 2025. They’ve barely nudged 0.3% since last October. What this suggests is that home prices in Dallas will likely avoid major price volatility in 2025 and home prices will be largely steady.

The booming economy and low unemployment rate keep folks moving in, supporting the housing market’s resilience.

• Robust demand for housing and commercial spaces driven by economic growth

The DFW metro area has experienced strong post-pandemic recovery. With an 11.2% leap in employment since February 2020—making it the fourth-fastest growth in the nation—and a population that just topped 8 million, Dallas is on a demographic and economic upswing.

Sure, with fluctuating mortgage rates and increased inventory, it’s hard to pin down the housing market’s next move. But with the economy on a roll, expect more companies to set up shop here, bringing an influx of workers to the DFW region.

Dallas Rental Rate Trends & Predictions

• Surging apartment supply stabilizes rents for now

As of the third quarter of 2024, CoStar reported that there were over 52,000 apartment units under construction in Dallas. 37,000 of these are expected to be completed within the next year. This significant increase in apartment supply has led to a rise in vacancy rates. The current vacancy rate as of Q3 2024 is 10.8%. That’s almost a 20-year high. 

Increased apartment supply has also affected rent growth negatively. Asking rent growth in Dallas was -1.3% for apartments as of the third quarter of 2024. But there’s some good news. Experts expect the supply of apartments in Dallas to peak at 38,000 units by the fourth quarter of 2024, before tapering off. Current Dallas housing market trends suggest rents might see a bit of positive movement in 2025.

• Projected rent increases due to slowing construction

Despite the bumps in the road, Dallas’ rental market is expected to find its footing by 2025.

According to CoStar Group, we might see steadier vacancy rates, hovering around 10%, and a possible 3% rent increase as new apartment construction slows down due to rising construction costs and a cooler market. As Dallas works through its surplus of new rental units and construction slows, we’re predicting a stable rental market for Dallas in 2025. 

• Rental demand remains robust despite fluctuating rent price dynamics

Even with the slight drop in rents and increased vacancy rates, Dallas-Fort Worth continues to experience strong rental demand. This is fueled by impressive job growth—450,000 new jobs since March 2020—and the arrival of roughly 153,000 newcomers in just a year.

Between Q1 2023 and Q1 2024, over 38,000 new rental units hit the market in DFW, and renters had snapped up 19,300 of these by Q1 2024. This indicates a strong absorption rate. During that time, DFW nearly outpaced New York City (20,800 absorptions) in rental demand. And it looks like this trend of strong rental demand isn’t slowing down soon.

San Antonio, Texas Housing Market Predictions 2025

Now let’s look at property price and rent trends and predictions for the San Antonio real estate market. Check out our San Antonio housing market forecast for 2025 below.

Overview of the San Antonio metro area

With a population of 2,558,143 as of the 2020 U.S. census, San Antonio is the 24th largest metro area in the United States. It is one of the most culturally diverse metro areas in the U.S., boasting a large Hispanic population. The city itself, with over 1.4 million residents is made up of 63.9% Hispanics, 23.4% White, 6.5% Black or African American, and 3.2% Asian.

San Antonio, also known as “Military City, USA” has a strong economy, boosted by its heavy military presence. Lackland Air Force Base, Brooke Army Medical Center, Randolph Air Force Base, and Fort Sam Houston, are all located here. San Antonio is also home to five Fortune 1000 companies including Valero Energy Corp, iHeartMedia, NuStar Energy (all in San Antonio), and Rush Enterprise (in New Braunfels).

Lately, job growth in San Antonio has been strong. From September 2023 to September 2024, the San Antonio-New Braunfels metro area saw a 2.4% increase in jobs. The sectors with the most growth during this period were manufacturing (4.9%), construction (4.4%), and the education and health services sectors (4%).

It’s no surprise that manufacturing is leading as this region is seeing significant activity from manufacturing companies. An example is JCB’s $500 million plant which is expected to create over 1,500 new jobs and have a $30 billion economic impact over 10 years.

San Antonio’s downtown was even rated first by Bloomberg for post-pandemic recovery. More recently, due to its thriving economy, San Antonio was ranked the 13th real estate market to watch for investment prospects by PwC and the Urban Land Institute.

Like Dallas, San Antonio is seeing a lot of in-migration. In fact, the city of San Antonio led other U.S. cities in population growth between July 2022 and July 2023. During this time, it added close to 22,000 new residents. The city of San Antonio is currently one of the most populous cities in the U.S., with a population of almost 1.5 million. 

But what about home prices? Redfin reported that the median sale price of a San Antonio home ($265,000) remained unchanged in October 2024 from last year. Specifically, it reported a 0.004% increase. So it appears the market has stabilized and we might see a slight decline in prices in 2025 after previous years of growth.

San Antonio Housing Market Forecast & Trends 2025

San Antonio Property Price Trends & Predictions 

• Continued price adjustment in 2025

In October 2024, San Antonio’s median home price barely budged from what it was last year. What this means is that the market is adjusting after significant growth. 

While prices are still stable, hovering around $265,000, Zillow predicts a steady drop in home prices across San Antonio in 2025. Based on its forecasts, prices will drop about 1.7% by July 2025. 

• Homes stay longer on the market as inventory increases

The San Antonio real estate market is now bustling with inventory. In July alone, there were about 15,056 active listings, with 4,899 new listings added that month. Buyers have more options than before and homes on the market longer, averaging 63 days. 

After a rollercoaster ride from a scarce 1.2-month supply in March 2022 to a generous seven months in December 2022, San Antonio’s housing market is steadying towards balance with a 4.3-month inventory as of August 2024. This trend is expected to continue in 2025, with Texas real estate market predictions suggesting that inventory may increase further, leading to longer days on market for homes.

San Antonio Rental Rate Trends & Predictions

• Rents in San Antonio have declined slightly

With over 11,000 new apartments added last year, and 13,700 units initiated in 2022, San Antonio landlords currently have to compete for renters. And renters are enjoying some pretty sweet deals like reduced rents, two months of free rent, etc.

Rents in San Antonio are currently in a state of flux. Zillow says in November 2024, San Antonio’s rents held steady at $1,695 on average – just a $5 dip year-over-year. 

Expect things to get a bit bumpy in the apartment rental market, but single family rentals might display stability or even growth in 2025.

• Potential for rental rate stabilization or increase as apartment construction slows down

As of Q3 2024, San Antonio builders have delivered 9,000 new apartment units—a number poised to rise by an additional 6,000 before year’s end.

Looking ahead, the pace might cool with just 8,000 units expected in 2025, and potentially even fewer in 2026. Such a slowdown could stabilize the rental market.

Right now though the absorption rates of these new apartment units have been slow. That means builders have built more units than San Antonians need. This mismatch is dragging down occupancy rates across the city’s apartment market.

Experts believe rents won’t see substantial increases until 2026. Until then, this oversupply of new apartments would keep rent growth in check. A rebound in rents might kick off once occupancy nudges past 92%, possibly in late 2025 or early 2026.

Houston, Texas Housing Market Predictions 2025 

Houston’s real estate market has seen a lot of positive changes in recent years. Known for its resilience, Houston is expected to see modest growth in 2025. Here are our Houston housing market predictions for 2025.

Overview of the Houston metro area

Greater Houston, also known as Houston-The Woodlands-Sugar Land is the fifth most populous metro area in the United States. As of 2023, Houston had a population of 7,510,253, and it is still growing fast.

It is home to 24 Fortune 500 companies. This places it third among U.S. metros in terms of number of Fortune 500 headquarters. With the largest port in the United States (Port of Houston), which is also the 16th largest in the world, Greater Houston is a major economic focal point for the Gulf Coast.

With almost 3.7 million workers, Metro Houston’s labor force is larger than that of 36 states and the District of Columbia. Between May 2023 and May 2024, the area added 86,000 jobs, with 38,000 of these added just within the first five months of 2024.

Metro Houston ranked second in 2023, behind Dallas, for the highest numeric population growth nationwide. The area saw an addition of 139,789 residents between 2022 and 2023. This is equivalent to a growth rate of 1.9%.

Of course, the real estate market is feeling a bit of a squeeze from the influx of new people. But supply is exerting its own pressure too. So it’s anyone’s guess what will happen next year. 

As of October 2024, the median home price in Houston was $348,000 according to Redfin, a 5.6% increase from last October. Single-family home sales have also picked up. Redfin reported 1,763 home sales in October 2024, up from 1,544 in October 2023. Despite experts forecasting some moderation in prices, the market is still seeing robust demand.

Houston, Texas Housing Market Predictions for 2025

Houston Property Price Trends & Predictions

• Predicted decline in home values

Zillow forecasts a slight dip in Houston’s home values. By mid-2025, Zillow says we might see home prices in Houston decrease by around 1.1%.

The Houston market shows changing dynamics from the post-pandemic conditions of fast home sales which put sellers in the drivers’ seat. With homes now selling in about 41 days, the market is tilting towards a balance. Another proof of this is that months of inventory has increased to 4.4 months as of October 2024, up from 3.5 months last year.

• The long-term growth outlook remains positive

Based on the current trends in Houston, we expect the temporary downturn in Houston home values in 2025 to be followed by upward price movement. The economy is strong, particularly in sectors like tech, healthcare and energy. Housing demand has also remained robust.

Even with relatively high mortgage rates, in October 2024, the HAR (Houston Association of Realtors) reported that single-family home sales in Houston increased by 12.8%. 

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It’s obvious that interest rates will play a part in how the housing market shapes out in 2025. But if mortgage rates can average around 5.5%, which experts predict might happen in late 2025, then we are likely to see even more buyer activity. 

Houston Rental Rate Trends & Predictions

• Rent growth will remain slow or turn negative due to strong supply and weak demand 

Over the past year, Houston has been on an apartment building spree. We’re talking 26,377 new units from September 2023 to September 2024. But only 17,237 of these have been absorbed, leaving the market with surplus units. It’s a classic case of too much of a good thing leading to a bit of a standstill (or even a backslide) in how much rent is going up.

For single-family rentals, there isn’t much price growth either. Prices edged up just 0.9% to $2,250 in October, which is pretty tame compared to the jumps we’ve seen before. With 5,917 single-family rentals hitting the market, an 11.6% jump from last year, renters have more choices. This means landlords have to compete for them by offering concessions.

• Class A multi-family properties maintain occupancy levels but rents have declined

While overall occupancy rates in Houston are down, Class A apartments have seen a slight increase in occupancy. But they aren’t immune to the blues. Landlords across all property types are offering incentives like a free month’s rent, no security deposits, and floorplan upgrades to keep tenants. According to Apartment Data, rents across all property classes have reduced by 5 to 7%.

The good news is that construction is slowing down, with just 16,537 units in the works as of October 2024. If absorption keeps steady, the Class A market will be the first to regain balance in 2025, followed by all other property classes.

Final Thoughts

Now that you’ve seen some of the top Texas housing market predictions for 2025, check out trends and forecasts for the US real estate market for the next five years.