The DFW Housing Market Hangs Tight
It's now summer, and the housing market in Dallas / Fort Worth is bucking the typical summer trend.
Key Takeaways
- DFW home sales continue to sputter.
- Inventory is at all-time highs.
- Home prices are slightly lower year over year.
In most years, spring and summer are the "hot" months for residential real estate in Dallas / Fort Worth. This is the time of year that kids are out of school, and parents seeking to move attempt to do so before the next school year starts. Consequently, we generally see prices rise in the summer as inventory shrinks and sales volume increases. This year, however, things are a bit muted in the DFW housing market.
Home Sales in DFW Drift Lower in May 2025
While home sales in Dallas and Fort Worth rose slightly between April and May, on a Year-Over-Year basis they were lower. Just over 9,000 homes traded hands in May 2025 compared with over 9,400 a year ago. This is significant considering the fact that migration trends continue to reflect more people moving to the area than leaving the area.
Potential homebuyers are simply continuing to be cautious due to mortgage rates not coming down and home prices remaining relatively high.
This, of course, begs the question: Where are all the new residents going? Are they renting? Are they moving in with family and friends?
The answer, it seems, is that many of the new migrants to DFW are locating in a few hotspots, such as Celina, Anna, and Melissa. In fact, AP News recently reported that the fastest growing city in the U.S. is Princeton, Texas - just east of McKinney!
So while overall sales in the DFW metroplex remain stagnant, there are some areas that are seeing huge demand and increased prices.
Inventory Continues to Climb
With sales declining, there are now more homes available in DFW than at any time in recorded history. As of the end of May, there were 35,555 homes that were active in the MLS (the database used by real estate agents and brokers). A year ago there were 25,915, and that was significantly higher than the prior year.
To underscore the inventory numbers, at the end of May, Months Supply stood at 4.69. As a reminder, a Months Supply of 6.0 is considered a balanced market where supply and demand are basically equal. While 4.69 is generally indicative of a seller's market, at this point it feels much more like a buyer's market due to the extreme nature of the housing market just a few years ago. Anecdotally speaking, I am seeing much more leverage with buyers right now than I've seen since I attained my real estate agent license in 2018. From my experience - and from conversations with others in the industry - this feels like a buyer's market.
Prices Dipped in April
As home sales have stagnated and inventory has climbed, home prices moved slightly lower in April 2025 compared with April 2024. This is quite unusual - April typically sees strong price growth in DFW.
If you glance at the chart above, it's hard to see the Year-Over-Year dip. In fact, one of the interesting aspects about the chart to me is the fact that prices really just seem to be leveling off from a long term perspective. Still, the dip is there when you compare this April with last April.
Now that I've presented a bit of a downer statistic, let me qualify it. This is not a huge drop. To be precise, Dallas / Fort Worth home prices declined by -0.21% in April. Nonetheless, the fact that we have any drop at all in April is telling. Again, the spring and summer months are generally when DFW residential real estate performs very well. These are the months when more people are moving. Consequently, prices almost always go up Year-Over-Year during these months.
If this were December or January, I'd say it's not as big a deal. But the fact that this is April's figure indicates that we are very definitely in a market lull right now in Dallas / Fort Worth. Is this cause for concern? Will the market have a significant drop? Will people start to lose their homes like they did in 2008?
Conclusion
I want to conclude by saying that the sky is not falling. Yes, DFW home prices are slightly lower on the whole (remember that some areas are experiencing tremendous growth right now, so lower prices are not happening everywhere in DFW). Inventory is up, and sales are down. But this does not mean that the DFW housing market is "in trouble."
While houses are staying on the market longer - currently 30-40 days - they are still moving. We aren't talking about a dead market. We aren't seeing the kind of slowdown we saw in the early 90s or during the 2008 crisis. There are still plenty of buyers buying homes, so if you need to sell, there is hope!
I think the main thing to keep in mind is that buyers have more choices now than they've had in a long time. Sellers were able to call all the shots for a number of years in DFW. Now the tables have turned a bit. Buyers have more leverage, but it's not unending leverage. Sellers do have options as well.
Will the Dallas / Fort Worth housing market continue to contract? I think we are likely to continue to see mostly flat home prices with a fairly balanced market between buyers and sellers. I don't see anything on the horizon pointing to a huge shift one way or the other. 10-year treasury yields continue to hover in the 4.5% - 5.0% range, and as long as this is the case, mortgage rates will not go lower. I think as long as mortgage rates stay where they are, the demand for housing will remain subdued.
Of course, the other side of the coin is incomes. If incomes were to suddenly rise significantly, this could offset the current impact of higher mortgage rates, as it would allow people to afford higher monthly payments for their homes. But there doesn't seem to be any indication from the latest personal income statistics to indicate wages are rising much. As such, I see the DFW housing market continuing to remain flat overall with pockets of hotspots in areas where migrants are coalescing.