Texas Housing Market Q3 2025: Steady Sales, Slight Price Slide & Growing Inventory

Christian Pilares

In the third quarter of 2025, the Texas housing market showed a mixture of resilience and transition. According to the latest data released by the Texas REALTORS®, home sales increased across most major metros, median prices slipped slightly, and inventory continued to build. These developments reflect deeper shifts in demand, supply, and affordability, and they hold lessons for buyers, sellers, and real-estate professionals alike. Houston Agent Magazine+2Texas Real Estate+2

Sales Are Up

Statewide, closed home sales rose by 4.9% year-over-year during Q3 2025. Texas Real Estate+1 That suggests underlying demand remains solid despite the headwinds of elevated borrowing costs and high home-price levels. Notably, in the Houston market, closings jumped by 7.1%, reaching 23,636 transactions in the quarter. Houston Agent Magazine

This uptick signals that buyers are still engaging with the market, perhaps motivated by shifting expectations, a desire to transact before conditions change further, or simply being ready to buy after a period of delay.

Prices: Slight Decline, Mixed Across Markets

While sales volumes rose, the median price for a Texas home edged down about 1.5% year-over-year, landing at $335,000. Houston Agent Magazine+1 Importantly, this small decline masks significant variability across markets: in 14 of the state’s major metro areas, prices increased, while in 12 they declined. Texas Real Estate

For the Houston metro specifically, the median home price also dropped roughly 1.5% to about $335,000. Houston Agent Magazine

The decline in the median suggests that while demand remains, buyer behaviour may be shifting downward in terms of price levels, perhaps as affordability constraints bite or as sellers and builders adjust expectations.

Inventory & Days on Market

Supply continues to build across the state. Active listings rose by 20.9% statewide and by 29.1% in Houston alone, where nearly 39,000 homes were on the market in Q3. Houston Agent Magazine+1

The increase in listings translated into a months-of-supply (MOS) metric of roughly 5.5 months statewide, up from 4.7 months a year ago. Texas Real Estate In Houston, the MOS was about 5.3 months, compared to 4.3 months in Q3 2024. Houston Agent Magazine

Similarly, the time homes sat on the market lengthened: statewide, the average time was about 96 days (63 days for sale + 33 days to close), six days longer compared with a year earlier. In Houston, average days on market increased by four days. Houston Agent Magazine

This expanding supply and lengthening time on market indicate a softer market tilt, not a collapse, but a shift away from an ultra-tight seller’s market toward more balance.

What’s Driving the Trends?

Several factors are driving the dynamics:

Affordability pressure – With mortgage rates still elevated and many buyers facing income stagnation or cost burdens, certain buyers are being pushed to the sidelines or into lower-price segments, thereby dampening price growth.
Supply catching up – Builders and sellers appear more willing to list, increasing competition in inventory. This provides buyers with greater choice and leverage.
Buyer segmentation – While the overall median dipped slightly, markets with strong job growth or constrained supply still saw price gains. The mixed results across metros reflect differing local conditions.
Strategic pause – Some buyers and sellers may be “waiting it out” for clearer signals on rates, economic conditions or market direction, which slows transactions and moderates price momentum.

Implications for Buyers

If you’re a prospective homebuyer in Texas, here are key takeaways:

More options: With inventory higher and supply cycles lengthening, you may have more homes to choose from and less pressure to rush into a decision.
Negotiation leverage: Buyers may regain some negotiation power compared with the frothy markets of recent years, for example, fewer multiple-offer wars, more time to inspect and compare.
Watch rates and carry costs: Even if the home price drops slightly, affordability still hinges heavily on interest rates, property taxes, insurance costs and down-payment size. A small rise in rate can offset a small price decline.
Local nuance matters: Because price movements vary significantly by metro or sub-region, drilling into your specific market is more important than relying on state-wide averages.
Long-term view: If you’re buying for the long term (5-10 + years), a slightly softer market may present an opportunity rather than a risk; you may buy at a more favourable entry point.

Implications for Sellers & Investors

For home-sellers or investors, the landscape also carries important signals:

Pricing cautiously: With higher inventory and more days on market, aggressive pricing or marketing may be necessary to avoid your home languishing or requiring concessions.
Condition and presentation matter: As buyers have more choices, properties that are well-maintained, well-staged and competitively priced will stand out more.
Expect more competition: More active listings mean other sellers are competing for the same pool of buyers. Differentiation becomes key, location, upgrades, value proposition.
Investor strategies: For investors, a more balanced market may offer buying opportunities where prices pause or dip, provided you’re confident in hold-period fundamentals (rent growth, job market, population flows).

What This Means for Real-Estate Tech & Services

Given your interest in real estate technology and assisting homebuyers, the Q3 2025 report underscores several actionable insights:

Micro-market intelligence: State-wide metrics give a useful “big picture,” but your platform or service should enable filtering by metro/sub-region, price tier, inventory trend, and “days on market” to surface actionable opportunities.
Affordability tools: With price declines modest and rates still a constraint, tools that model total cost of ownership (including taxes, insurance, maintenance) become very useful for buyers who may be budget-sensitive.
Supply signals: Highlighting inventory trends (months of supply, listing growth, time on market) will help users understand when markets may be pivoting.
Lead timing: With buyers still active but more cautious, your communications could emphasise “now is a window of opportunity” rather than “rush before you miss out.” That fits well with your brand voice around grounded optimism and strategic action.
Audience segmentation: Your services could tailor messaging differently for first-time buyers (affordability-driven) versus investors or up-graders (deal-driven). The uneven price movements across regions suggest that different buyer personas will have different opportunities.

Outlook & Watch-Points

Moving forward, several watch-points emerge:

Interest-rate trajectory – A drop in rates would likely trigger renewed buyer activity and possibly lift prices again; conversely, rate spikes could dampen demand further.
Job and income growth – Texas’s job market remains a strength, but if wage growth slows or inflation rises, affordability could again become a headwind.
Housing supply response – If builders ramp up in response to higher inventory, oversupply might pressurise prices further; if supply tightens, price stability could return.
Localisation – Regional markets (e.g., Austin, Dallas-Fort Worth, Houston, smaller metros) will likely diverge in performance and opportunity.
Policy/regulation – State or local housing policy, zoning changes, or tax changes could shift dynamics, especially in high-growth markets.

Conclusion

The Q3 2025 housing report from Texas REALTORS® presents a market in transition: steady sales growth, modest price softness, and rising inventory. For buyers and sellers alike, the shift is away from the frothy seller-dominant conditions of the recent past toward a more balanced dynamic. That means opportunity, but also more need for strategic decision-making.

If you’re helping homebuyers, whether through an app, advisory service, or brokerage, now is a time to emphasise data-driven insight, local nuance, and total-cost transparency. Your brand voice of being “relentless, helpful and precise” aligns well with this moment: guide buyers not just to “find a home,” but to find the right home under the right conditions.

Let me know if you’d like a version of this article tailored for a specific Texas metro (e.g., Houston or Dallas-Fort Worth) or converted into a social-media-friendly format (LinkedIn carousel, Instagram post series, etc.).