Texas Housing Crash This Year? Why Prices Are Falling Fast

Texas real estate has officially hit a turning point.

Homes are sitting on the market longer.
Price reductions are showing up daily.
Buyers are backing out of contracts.
Sellers are feeling real pressure.

So the big question is everywhere right now:

Is Texas heading toward a housing crash in 2025 — or is this the biggest buying opportunity we’ve seen in years?

I’m Wale Lawal, a Texas-based real estate broker and investor with 30+ rental units, and I’ve helped 400+ buyers and investors navigate shifting markets across Houston, Dallas, Austin, and beyond.

Let’s break down what’s really happening, why prices are falling, and exactly how smart buyers and investors are winning right now.

What’s Actually Happening in the Texas Housing Market

This isn’t noise. It’s a real correction.

Across Texas, we’re seeing:

• Longer days on market

• More price cuts

• Rising inventory

• Increased builder incentives

• Buyer hesitation due to affordability

According to data from the Texas A&M Real Estate Research Center, active listings in Texas are up more than 30% year-over-year, reaching levels not seen since 2011.

That matters — because real estate is driven by supply and demand, and right now supply is winning.

How Texas Got Here: The Perfect Setup for a Reset

1. The Pandemic Migration Boom Is Over

From 2020–2022, buyers flooded into Texas from:

• California

• New York

• Virginia

• Midwest states

Why?

• No state income tax

• More space for the money

• Ultra-low interest rates (2%–2.75%)

But migration has slowed sharply — and builders can’t stop construction overnight.

2. Texas Is Leading the Nation in New Construction

Texas currently issues more new residential building permits than any other state.

That’s great long-term — but short-term, it created a supply wave that demand hasn’t caught up to yet.

Builders now have too much inventory on their books, and holding homes costs them money every month.

3. Affordability Broke the Market

Even with price cuts, affordability remains strained:

• Mortgage rates hovering around 6.5%

• High property taxes

• Higher insurance costs

When monthly payments jump by hundreds of dollars, buyers don’t panic — they freeze.

And when buyers freeze:

• Homes sit longer

• Sellers reduce prices

• Builders increase incentives

This Is Not 2008 — Here’s Why

Let’s be very clear.

This is not another 2008 housing crash.

Here’s what’s different:

Today’s buyers generally:

• Have real income

• Have real credit

• Are buying with equity

• Are locked into fixed loans

This is a market reset, not a financial collapse.

Real Example: How Patience Paid Off $110,000

One of my clients almost bought a new construction home last year.

He didn’t feel comfortable — so we waited.

Nine months later:

• Same floor plan

• Same neighborhood

• Same builder

But now:

• $80,000 price reduction

• $30,000 in upgrades

• Closing costs paid

• Rate buy-down from 6.5% to 4.99%

That’s over $110,000 in value — simply from timing and leverage.

Builders aren’t being generous.
They’re being practical.

They need to sell.

Why Builders Are the Weakest Link Right Now

Builders are not investors.
They are manufacturers.

They must:

• Sell inventory

• Free up capital

• Move to the next project

Right now, builders across Texas are offering:

• $50,000–$100,000 price cuts

• Rate buy-downs

• Paid closing costs

• Appliance packages

• Upgrades included

I receive emails weekly from builders asking:

“Do you have serious buyers? We’ll make it worth their while.”

That’s leverage — if you know how to use it.

What Sellers Should Do Right Now

If you’re selling in Texas in 2025:

• Price based on today’s comps, not 2021

• Make your home show-ready

• Fix obvious inspection issues

• Improve curb appeal

• Be flexible on terms

Overpricing in this market means:
6–12 months of sitting
Bigger price cuts later

What Buyers Should Do Right Now

This is a buyer-controlled window — but only for prepared buyers.

Smart buyers are:

• Getting fully pre-approved

• Targeting high-inventory areas

• Negotiating terms, not just price

• Leveraging builder closeouts

• Buying down interest rates

You don’t win by chasing deals.
You win by structuring them correctly.

Why Investors Are Quietly Winning

For investors, this market is ideal:

• New construction at discounts

• Lower maintenance

• Strong rental demand

• Builder concessions

Some builders are even:

• Relaxing no-rental rules

• Offering PM credits

• Selling below replacement cost

This is how portfolios are built — quietly, patiently, strategically.

So… Is Texas Crashing or Resetting?

This is not a crash.

It’s a normal and healthy correction:

• Supply caught up

• Prices adjusting

• Buyers regaining leverage

Bad for over-leveraged sellers.
Great for prepared buyers and investors.

3 Smart Moves to Make Right Now

1. Get pre-approved and run real numbers
   Compare payments with rate buy-downs vs price cuts.

2. Target high-inventory builders & closeouts
   Especially communities nearing sell-out.

3. Structure offers aggressively but intelligently
   Price + rate + repairs + incentives — get it all in writing.

If a seller won’t work with you?
Walk away. There’s more inventory coming.

Final Thoughts

Texas real estate is changing fast — but change creates opportunity.

If you stay informed, patient, and strategic, this market can put you years ahead financially.

If you want help:

• Finding the right deal

• Avoiding costly mistakes

• Structuring offers the smart way

Book a clarity call on my calendar

I’ll walk you through your numbers, your market, and your best next move — with no guesswork.

I’m Wale Lawal, helping you build wealth through Texas

real estate.

And yes — the window won’t stay open forever.