More than a third of home listings in the Dallas area reported price cuts in recent months and sales numbers are slowly creeping up.
Inventory remains high. This housing market that once moved at a breakneck pace slowed as migration and employment growth decelerated.
But mortgage rates have dropped nearly half a percentage point since the summer. Sales are up slightly as buyers start to take advantage of some of the leverage they’ve gained in recent months — particularly in the northern suburbs.
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“There are pockets of good news,” said Sriram Villupuram, a professor of finance and real estate at the University of Texas at Arlington.
D-FW Real Estate News
The data
The median price of a home in Dallas-Fort Worth was nearly $390,000 in September, flat compared to last year. The national average was $422,600 in August, according to the National Association of Realtors.
There were 7,666 transactions closed in North Texas during the month, a more than 5% rise year over year. That was out of 35,465 active listings in North Texas, up 18.6% from last September.
Total months of inventory on the market was 4.6 months. Months of housing inventory tracks roughly how long it would take all the homes on the market to sell at the current pace.
From initial listing to final closing, homes sat on the market a total of 95 days — eight days longer than last year in North Texas.
As inventory remained high, sellers slashed asking prices across the region. Zillow reports that 33% of listings in the Dallas area in August had a price cut. That’s down from more than 36% in July but higher than in recent years.
“That’s more price reductions we’ve seen since the recession,” said Jim Fite, president and CEO of Century 21 Judge Fite Co. in Dallas, one of the region’s larger residential real estate firms.
Fite said the increase in price cuts comes because sellers were still seeking 2022 and 2023 prices for their homes. However, the demand wasn’t in the market to sustain those asking prices.
Sellers feel like they may not get all of the equity that they previously thought they had built up in their home. Seeking to profit off what they have, they’ll drop prices looking to cash out, Villupuram said.
“They might be willing to negotiate,” he said. “That could lead to a softening of prices in the Metroplex on average going forward,” he said.
Todd Luong, a ReMax real estate agent in Frisco, has noticed a similar trend, saying sellers have been more aggressive in their price cuts.
Luong pointed to median price drops in Collin and Denton counties as proof.
In Collin, the median home price was nearly $450,000 in September, down 6.3% year-over-year. Closed sales in Collin were also up nearly 12%.
The drop was similar in Denton County. The median home price in September was just nearly $437,000, a 6% drop. Sales were up 8.4%.
“Our office is right on the border of Collin County and Denton County. A lot of sellers I’ve seen are doing big price drops in Denton County,” he said.
However, Luong said there isn’t significant buyer movement in the larger D-FW market yet. A few sellers are taking their properties off the market with some saying they’ll wait until the spring.
“I’ve still got listings here that we’re not getting a lot of showings on,” he said. “We’re not getting any offers. It’s still pretty slow, but compared to last year, I would say it’s a little better. … My buyers are a little more active.”
Several factors have kept demand low. While prices are down year over year, they remain well above pre-COVID levels.
A slowdown in Texas’ job market has also affected housing demand, Villupuram said.
Total employment in Dallas−Fort Worth fell an annualized 2.3% in June after rising 2.1% in May. The unemployment rate ticked up to 4%.
Information, manufacturing, and professional and business services all cut positions, according to data from the Dallas Federal Reserve.
Despite a strong August jobs report, the Dallas Fed’s Texas Employment Forecast still softened its statewide projections for the year to a 1.3% increase in 2025.
“Employment growth accelerated in August bringing year-to-date job growth to 1.2%, which is still below Texas’ long-term trend of 2.0%,” Luis Torres, Dallas Fed senior business economist, said in a statement.
Home insurance costs continue to be another hurdle for potential buyers, Luong said. Insurance costs are driving monthly mortgage payments beyond affordable rates, and buyers are now forced to consider these costs before home shopping.
“It’s starting to get so high that mortgage loan officers are needing to bring up the topic of insurance costs when pre-qualifying a buyer,” he said. “You didn’t see this kind of stuff in the past, but now it is pretty common.”
Mortgage rates have dropped nearly half a percentage point since July, but they remain above 6%. The average 30-year rate as of Oct. 9 was 6.3%, according to Freddie Mac.
A 6% mortgage rate is seen by some market watchers and potential homebuyers as a magic number that spurs activity and makes purchasing a home more affordable.
What’s next?
Luong and Villupuram differed slightly on their market outlooks for 2026. Villupuram said he expects homes to get less expensive.
“I think it’s going to soften into a buyer’s market,” he said. “I believe the channel is going to be through pricing. I’m not super confident about rates giving buyers a helping hand.”
Luong said if mortgage rates fall, it could drive more buyers to the market. The Federal Reserve cut its key interest rate last month and signaled two more cuts this year.
The Fed’s decisions influence mortgages, but don’t determine rates. Instead, mortgage rates tend to follow the 10-year Treasury yield.
A quarter percentage point drop would lower payments on a 30-year, $400,000 mortgage by about $65 a month to $2,740 a month, according to Bankrate.com.
“I think you’re really going to need to see some interest rates starting with a number five in order for anything to really change,” Luong said.
For there to be any meaningful help for buyers, mortgage rates will need to fall to 5.8% for a month or two, Fite said.
“Prices may drop a little bit, and that will be healthy for buyers,” he said. “But these were inflated prices anyway.”
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