Is This a Good Time to Buy a House in Texas?

Purchasing a home is a substantial financial commitment, requiring careful consideration of numerous influencing factors. Understanding the current environment and your own readiness is paramount before moving forward with a home acquisition. This article explores various components that contribute to the current housing landscape, helping you evaluate the broader picture.

Current Texas Housing Market Conditions

The Texas housing market has recently shifted, presenting a more balanced environment for prospective buyers. The statewide median home price showed stable growth, rising approximately 0.6% year-over-year to $356,000 as of June 2025. Overall, median home prices in Texas saw a slight uptick of 1.2% in 2024.

Housing inventory has substantially increased across Texas. Active listings from April to June 2024 were up 40.8% year-over-year, marking the highest supply in at least eight years. This surge provides more choices for buyers, moving the market closer to a balanced state. Months of supply increased from 3.1 months in Q2 2023 to 4.6 months in Q2 2024.

Despite increased inventory, sales volume has modestly decreased. Statewide home sales were down 3% in Q2 2024 compared to Q2 2023, with 93,417 homes sold. Closed sales also declined 1.5% from Q1 2024 to Q1 2025.

Homes are generally taking longer to sell, providing buyers more time to evaluate properties. The median days on market averaged 72 days in Q1 2025. This extended time, coupled with increased inventory, suggests a shift from the rapid pace of previous years.

Economic Factors Influencing the Market

The Texas housing market is shaped by broader economic forces. Mortgage interest rates directly influence affordability and purchasing power. As of early August 2025, 30-year fixed mortgage rates are approximately 6.54% to 6.751%, and 15-year fixed rates are around 5.67% to 5.783%. While lower than late 2023 highs, rates remain above 6%, impacting buyer budgets.

Employment and job growth drive housing demand. Texas has a robust job market, adding more jobs than any other state in 2024, with a 2.0% annual nonfarm growth rate. The economy is projected to grow 2.5% in 2024, adding nearly 350,000 jobs. Industries like construction, education and health services, professional and business services, energy, and financial activities show significant gains. This strong job creation attracts new residents and supports homeowners.

Population growth and migration further fuel housing demand. Texas added over 560,000 residents between July 2023 and July 2024, reaching over 31 million. This growth, driven by international migration and relocation from other U.S. states, creates a continuous need for housing. The population is projected to continue growing substantially, potentially nearing 98 million by 2100.

The cost of living in Texas also influences housing decisions. Texas generally has a cost of living 5% to 7% lower than the national average. This relative affordability, especially compared to states like California, makes Texas attractive for those seeking a lower financial burden, though housing remains the largest expense.

Assessing Personal Readiness

Beyond market conditions, personal readiness is paramount for a home purchase. Financial stability is key, encompassing stable income, emergency savings, and a manageable debt-to-income (DTI) ratio. Lenders scrutinize DTI, preferring it below 43% for mortgage qualification.

Credit health plays a significant role in securing favorable mortgage terms. A strong credit score, typically above 700, signals responsible financial behavior and can lead to lower interest rates, saving money over the loan’s life. A lower score may result in higher rates or loan denial.

Sufficient funds for a down payment and closing costs are critical. While some loan programs allow down payments as low as 3% to 5%, a larger down payment, such as 20%, can help avoid private mortgage insurance (PMI) and reduce the loan amount. Closing costs, including appraisal fees, title insurance, and loan origination fees, typically range from 2% to 5% of the loan amount and are paid upfront.

Considering long-term goals is also important. Homeownership is a significant commitment; buyers should evaluate how long they plan to reside in the home and how this aligns with life plans. Factors like career stability, family growth, and potential relocations should inform the decision, as selling a home soon after purchase can lead to financial losses due to transaction costs.

Regional Market Differences in Texas

Texas is a geographically diverse state, and housing market conditions vary considerably by region. While statewide trends offer a general overview, local dynamics present a more nuanced picture. Regional differences are influenced by unique factors, creating distinct market environments.

Major metropolitan areas like Houston, Dallas-Fort Worth, Austin, and San Antonio typically exhibit higher median home prices and more competitive markets due to concentrated job opportunities and population density. While Austin has seen a cooling market, Dallas-Fort Worth and Houston show more stable conditions. These urban centers generally have higher sales volume and active listings, but also face ongoing demand pressures.

In contrast, smaller cities and rural areas often present different market characteristics. These regions may feature more affordable home prices and a greater supply of available land. The pace of sales can be slower, and days on market may be longer compared to metropolitan areas. Local economic drivers, such as agricultural industries or regional businesses, play a more pronounced role in shaping these markets.

Factors contributing to these regional disparities include local job markets, which dictate employment opportunities and income levels. Population density also plays a role; denser areas typically have higher demand and less available land, driving up prices. The availability of land for new construction further influences inventory and affordability, with urban areas constrained by space while rural areas have more room.