All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month-over-month, unless stated otherwise.
It’s becoming more apparent that the housing market is facing a concerning supply and demand (more precisely, effective demand) imbalance, as rapidly growing inventory continues to outpace constrained buyer affordability—in Texas especially. The last time the state experienced such elevated levels of inventory was in 2013 when the U.S. housing market was just beginning to crawl out of the Great Recession.
It has turned the normally busy and more seller-friendly spring market into one marked by steepening price cutting and increasingly favorable pricing conditions for buyers. Sellers of existing homes are also contending with heightened competition from homebuilders, who are increasingly offering affordability incentives using mortgage rate buydowns and closing costs assistance to attract buyers.
Unprecedented inventory availability, coupled with significant sellers’ willingness to negotiate prices, has sparked a surprising resurgence in buyer interest, and buyers swiftly capitalized on the shifting market dynamics, driving a sharp rebound in June home sales and reversing the early spring slump. Forward-looking indicators, including pending sales data, point to sustained momentum into July, with total closing on track to surpass 2024 levels.
Property values across Texas continue to show signs of weakening. According to the Texas Real Estate Research Center’s Home Price Index, June marked the third consecutive month of little to no year-over-year (YoY) price growth statewide. Even Houston, long considered one of the most resilient markets, reflected the broader slowdown. June was the first time since December 2011 that the city’s home prices failed to register any annual gain, representing a significant break in the trend. Meanwhile, markets such as Austin, Dallas, and San Antonio are leading the decline, with prices continuing to slide under the pressure of elevated inventory and affordability challenges.
While mortgage rates have eased slightly from recent highs, the drop remains insufficient to meaningfully lift buyer affordability. At the same time, Texas is mirroring broader labor market softening, with the June job report showing modest job losses and a large downward revision to May’s figures from earlier estimates.
Compounding these pressures, the July CPI report indicates inflation is reaccelerating, reflecting the impact of new tariffs. Inflationary pressure from new tariffs is likely to persist in the near term as businesses are anticipated to begin shifting the costs—either partially or in full—through higher prices on goods and services. In light of the shifting economic dynamics, will the Federal Reserve consider a proactive rate cut as early as September to counter the risk of a deeper slowdown? Such a move could offer much-needed relief to homebuyers and bring out pent-up demand, helping restore stability in the housing market.
June Home Sales Bounce Back, Improving Year-To-Date Performance
Texas recorded 32,157 closed home sales in June—including both new and existing homes—accounting for 8.2 percent of all U.S. home sales that month. Year-to-date, the state’s share stands at 8.6 percent.
- June home sales bounced back sharply, up 7.7 percent YoY. Year to date, home sales mirror 2024 levels.
- Nationally, seasonally adjusted home sales were flat from June 2024. Sales declined 2.7 percent month over month (MoM) since May. The MoM declines were driven by declines in the Northeast (8 percent) and the Midwest (4 percent). Sales in the South were down 2.2 percent, while sales in the West remained steady and were up 1.4 percent. Year to date U.S. home sales were 1.5 percent below 2024.
- Texas’ statewide median home price in June reached $345,000, a small YoY increase from $340,000 in June 2024. The Texas Real Estate Research Center’s Home Price Index, which is a repeat sales index and controls for the quality of homes, showed no YoY price change from June 2024.
- Nationally, the median home price rose to $435,300, up modestly from $423,700 YoY.
- Pending home sales in June point to another statewide increase in overall sales volume.
Growing Inventory Drives Steepening Seller Price Concessions
- As of June, the inventory is at 5.7 months’ supply, up from 5.5 months in May and 4.5 months a year ago. In Texas, a relatively balanced inventory typically ranges from three to four months, with seasonal fluctuations within that band.
- The median days on market (DOM) in June was 36 days—up by 7 days from a year earlier. On average, homes closed in June spent 60 days on the market, not including closing time.
- The average time to close a pending sale remains steady at approximately 30 days. As the peak spring homebuying season tapers off, lenders are reporting a noticeable decline in loan pre-approval requests.
- In June, sellers reduced prices by $5,000 or more in two-thirds of closed sales, with average concessions rising to $13,000—up from $10,000 YoY and $11,500 MoM.
Active Inventory Growth Persists, But Momentum Slows
- As of June, more than 156,000 homes were actively listed for sale—a 27.2 percent YoY increase—pushing inventory to its highest level in 14 years.
- As the spring homebuying season winds down, the pace of inventory growth has moderated. Active listings increased by 3.4 percent MoM—significantly slower than the 7.1 percent rise seen in May and 7.8 percent in April.
- At the current pace of sales, the inventory turnover ratio stands at one sale for every five active listings, down from nearly one in four a year ago, indicating a slower market pace.
New Listing Activity Peaks as Seasonal Slowdown Sets In
- Year-to-date new listing activity is significantly more active than in previous market cycles despite millions of homeowners being locked into a low-rate mortgage, which contributes to a slow housing market.
- Year to date, new listings are up 12.6 percent from 2024 and are more than 20 percent above pre-pandemic levels of seller activity.
- (Not shown) Separately, new listings of existing homes have notably outpaced those of new construction. Existing home listings are up 14.3 percent, compared to a 7 percent increase in new construction.
- New listings of existing homes have declined from their peak levels observed in May, indicating a seasonal slowdown in market activity.
Regional Price Softening Persists and Widens
- Statewide home prices remained unchanged from June 2024, marking the second consecutive month without YoY gains.
- Notably, for the first time since December 2011, Houston saw no YoY price gain in June, a marked departure from its consistent trend of home price appreciation averaging around 2 percent.
- The inventory pressure in Houston has quickly intensified going into 2025. Since January, active inventory has surged 34 percent YoY and is showing no signs of tapering off as late as July.
- High inventory is continuing to place downward price pressure in Austin, Dallas, and San Antonio, but has also helped driving sales as buyers are positioned to negotiate price concessions (see Appendix Table 3).
- In June, the Big Four metros saw median price reductions of $15,000 in Dallas, Houston, and San Antonio, and $24,000 in Austin.
Local Housing Market Indicators
Source: Texas Housing Insight | June 2025 | Texas Real Estate Research Center (By Yanling Mayer)
