If you’re wondering what the deal is with the Texas housing market and if there is still a housing market shortage, you might be surprised to find out. As experienced house buyers in Texas, we’ve seen the good, the bad, and the ugly with the shifting market. But there is reason to celebrate, the shortage appears to be ending much faster than anyone predicted.
The market has bloomed, and we’re seeing a complete transformation in the Texas housing landscape heading into the new year. We’re starting to see new selling opportunities like more inventory, changing buyer behavior, and new construction that didn’t exist in the last couple of years. So if you’re thinking about selling, learning more about these changes will be helpful when making decisions about timing and strategy.
The Short Answer: Why the “Shortage” is Ending Fast
We’re finally seeing the housing shortage in Texas come to an end. Crazy, how only a few years ago, we saw households in bidding wars, probably won’t see that again for a while.
So far, the figures as of December 2025 show the housing supply at 40% in major metro areas like Dallas-Fort Worth, Houston, and Austin compared to what we saw in 2023. Because there are more homes available, it’s giving buyers more options to choose from and making it more difficult for sellers.
It’s hard to adjust to this new norm for homeowners. We’re not seeing houses sell within days anymore; now it’s taking weeks or months. This “normalizing” we’re seeing in the market right now definitely creates some twists and turns for both buyers and sellers.
The “Great Reset”: 3 Reasons Texas Inventory is Stacking Up
Probably one of these three reasons is why Texas has so many more homes for sale right now.
1. The “Lock-In” Effect is Fading (More Sellers Listing)
Homeowners only a few years ago were able to lock in at a 2-3% interest rate on their mortgage. Selling meant higher rates that they couldn’t afford, but now that is changing.
What we’re starting to see now is households prioritizing their actual housing needs over keeping low rates. Instead of being stuck staying in a home that doesn’t fit, people are realizing that it’s better to just move forward with life. This change in thinking is adding thousands of listings monthly. In Houston alone, listings jumped 60% compared to December 2023.
2. New Construction Oversupply (Builders Aggressively Cutting Prices)
After the post-COVID construction boom, the Texas markets were flooded with new homes. Builders who started projects in 2022-2023 are finishing them in a very different market.
What’s going on now is that major Dallas-Fort Worth builders now offer $30,000-50,000 in incentives, rate buy-downs, and upgrades. Some will even offer to cover closing costs and guarantee trade-ins for existing homes.
All this new home construction going on hit the $300,000-600,000 range hardest, where builders compete directly with resale homes. What we’re seeing now in Texas suburbs is new inventory pressure forcing competitive pricing.
3. Days on Market (DOM) Increasing in Austin & DFW
Gone are the days of a property selling within days. Now it’s taking houses a lot longer to sell. The average days on market in Austin was 12 days back in early 2023, and it jumped to 45 days in December of 2025.
You may be wondering if that means anything for the Texas real estate market? It just signals that market conditions are coming back down to normal. We’re seeing more buyers taking their time, comparing options, and negotiating rather than rushing into anything. Fortunately, this isn’t a bad thing for housing development overall – it just means it’s more balanced now.
Will Home Prices Drop in Texas in 2026?
If we were able to see the future, our housing market predictions in Texas would suggest prices will be more stable, rather than seeing a crash. In other words, instead of dramatic drops, we’ll see selective decreases in overpriced areas.
We should’ve known that the home prices we saw in Texas during 2021-2024, which rose 8-12%, wouldn’t last forever. Now we’re experiencing a correction and seeing prices go back down to realistic levels that match both local income levels and housing affordability.
Yes, some areas will likely see modest price cuts, especially where high home prices are way above what local wages could support. But Texas has a growing population and a strong job market, which should prevent a dramatic crash that other states have had to deal with.
What we anticipate seeing in 2026 is property values flattening or dropping slightly. Really, the biggest changes we expect to see take a hit are the luxury housing market and overpriced new construction.
The “New Build” Threat: Competing with Builder Incentives
Unfortunately, selling your home in 2026 means competing against builders with aggressive incentives. New construction is so much more than just building homes; it’s creating a complete package that resale properties just can’t match.
Builders offer smart home technology, landscaping packages, warranties, and energy efficiency that older homes lack. They’re using manufactured housing and new construction methods to stay competitive while adding modern features.
Builders are now adding smart home technology, landscape packages, warranties, and energy efficiency that older homes just can’t compete with. They are also using manufactured housing and new construction methods.
For current home sellers, pricing strategy is everything. Your home will need to stand out and have clear value to compete with new construction in similar school districts and neighborhoods.
Who Should Sell Now vs. Who Should Wait?
Should you sell now, or should you wait? To sell in this ever-changing market, it all depends on your specific situation and timeline.
Sell Now If:
- You need to relocate for work or family reasons
- Your current home no longer fits your lifestyle
- You’re facing affordability challenges with your current property
- You want to avoid further market uncertainty
Consider Waiting If:
- You’re in a desirable location with limited new construction competition
- Your home needs significant updates to compete effectively
- You can afford to wait 12-18 months for market conditions to potentially improve
- You’re in a strong rental homes market where leasing could be an alternative
Don’t worry about timing the market perfectly; the biggest thing you need to do is be realistic about your local market conditions and your personal timeline – everything else should fall into place.
How to Sell in a “Normalizing” Market (Without Renovating)
Today’s market isn’t playing; you’ll need to have different strategies up your sleeve. Here is how you can prepare your home to be competitive without needing major renovations.
- Pricing Strategy: Don’t assume you’re going to get the same price your neighbor got two years ago. Instead, you need to price based on recent home sales. Remember, housing prices have stabilized, so overpricing means your home will sit on the market for a while.
- Professional Presentation: You need to go over and beyond, so invest in professional photography, staging, and deep cleaning. Buyers have so many options to choose from, so first impressions are everything.
- Flexibility on Terms: You’re going to need to be flexible when it comes to closing dates, repairs, and other terms. The whole “take it or leave it” offer is a thing of the past.
- Highlight Unique Features: To stand out above the rest, you need to show what makes your home different from new construction. Maybe it’s mature landscaping, a pool, established neighborhoods, a screened-in porch, unique details, or proximity to amenities.
Why Four 19 Properties Buys When Retail Buyers Won’t
In this ever-changing market, traditional buyers are getting harder and harder to please, which only creates problems for sellers who need certainty and speed. That is why selling a house off-market would be a better option.
We buy houses in Houston and throughout Texas, no matter the market or property condition. While retail buyers compare dozens of options and negotiate endlessly, we offer simple solutions for homeowners who need to sell fast.
Our process removes traditional sale uncertainties: no showings, no repairs, no financing issues, and no worrying about deals falling through. How we buy houses at Four 19 Properties uses a straightforward evaluation that delivers a fair cash offer in 24-48 hours.
Whether you’re struggling with rents that don’t cover investment property costs, facing eviction issues, or need to sell your house for cash in Dallas or anywhere in Texas, we solve problems when traditional sales don’t work.
For homeowners wondering how to estimate home value in TX in this shifting market, we provide free evaluations that factor in current conditions.
Conclusion
The winds of change are here; the Texas housing shortage is coming to an end and creating a more balanced market for 2026. Yes, sellers are dealing with more competition, but that creates buyer opportunities and realistic options for homeowners who need flexible selling options.
Being able to decipher these market changes is the foundation for smart property decisions. Whether you list traditionally, wait for better conditions, or get a free cash offer from companies like Four 19 Properties, having accurate local market information matters most.
The housing shortage that controlled Texas real estate for years is becoming a sustainable, balanced market. For homeowners ready to capitalize on current opportunities, now’s the time to evaluate options and make decisions based on today’s reality, not yesterday’s conditions.