Home Sales Decline in DFW in April 2025
While prices have remained stable, the number of homes sold in the Dallas / Fort Worth area has been declining.
Key Takeaways
- Year over year home sales have been declining since January.
- The current number of homes on the market is at its highest level in over 20 years.
- Prices have remained stable despite declining sales.
- Months Supply is at its highest level in 20 years.
While the overall health of the Dallas / Fort Worth housing market continues to be strong, the number of homes selling is continuing a downward trend. The graph below shows the number of closed sales in the entire north Texas MLS over the last five years. You can see that the overall trend is clearly moving lower. The peaks and valleys all correspond to the normal cyclical pattern of yearly real estate activity. What is important is that each peak is lower than the previous peak, and each valley is generally lower than the previous valley. This is a sign of overall decreasing home sales activity for the entire region.
To be clear, this graphic represents the home sales activity for all of the north Texas MLS, which includes some areas outside of the DFW metroplex proper.
Details
For the month of April 2025, home sales were down -6.0% year over year in the north Texas area. The last time we saw this level of selling activity in the month of April was in 2020, and that was in the grips of Covid. In contrast, the number of active listings increased by over 28% in April. In fact, if we look back 20 years, there has not been a month with this many homes for sale at one time.
What this means is that more and more homes are coming on the market while fewer and fewer homes are actually selling. To put it another way, demand for homes in the DFW area is waning.
The Months Supply figure confirms this fact. Months Supply now stands at 5.0 for the first time in 20 years. As a reminder, Months Supply is a measure of the supply of homes currently available for purchase. A Months Supply of 5-6 or higher is generally considered a buyer's market - i.e. there are more sellers than buyers and buyers have more leverage - while a Months Supply lower than 5 generally indicates a seller's market.
All of this, of course, begs the question: What will happen to home prices?
How Does This Level of Sales and Demand Affect You?
So far, home prices have continued to increase slightly, but if supply continues to exceed demand, prices will eventually come down. I think the fact that prices are still elevated demonstrates that we have had such a red-hot housing market for so many years that even this decrease in demand has not yet caused prices to drop.
The thing to remember about the housing market is that homes will sell at prices people are willing to pay, and sometimes those prices might defy logic. As with the stock market, the housing market is susceptible to human emotion. As long as people are willing to pay higher prices for homes, prices will continue to go up.
If you are a homebuyer, you definitely have negotiating room with sellers. In addition to fewer homes selling, homes are staying on the market longer now than they have in quite some time. This means that, as a homebuyer, you can often ask for and receive concessions that would have been unthinkable just a few years ago.
On the other hand, if you are a seller, you have to remember that your house may take longer to sell than it would have a few years ago, and you may have to be willing to give in to more buyer demands.
Conclusion
To sum it all up, Dallas / Fort Worth home sales are continuing to decline, and inventory is continuing to increase. Prices, however, have still not come down, and it's difficult to say when or if they ever will come down.
One of the more interesting aspects to all this is that we are talking about this in what should be the peak selling season of the year. To be clear, the housing market in DFW is still strong. It's just not as strong as it has been for many years. Where we go from here is anyone's guess. There are countless factors that can impact the housing market. But as long as mortgage rates remain elevated and home prices continue to also remain elevated, I think we will continue to see slowing activity in the Dallas / Fort Worth housing market.