Rural Land | Fall 2025

Prior to second quarter 2025 (2Q2025), we excluded sales that exceeded $30,000 per acre, as these were mostly development or transitional tracts (at least prior to 2020). However, after careful consideration of how the market has changed over the last five years, we decided to raise the upper limit to $50,000 per acre retroactively from 2020. For more information on the impact of this change on the reported statewide prices over the past five years, see our latest rural land technical report.

While the impact on reported price is noteworthy, the prior trends and annualized percentage changes are remarkably similar to before. Through 2Q2025, average price per acre improved 4.6 percent year over year (YoY), continuing the pickup in YoY gains reported last quarter. Sales volume remains weak, down 10.6 percent YoY. However, typical tract size was larger, and total acres sold increased 4.5 percent. Total dollar volume expanded 9.3 percent YoY.

Regional Market Dynamics

Price was down modestly in Regions 2 and 7 but was up double digits in Regions 3 and 5. Unlike Region 3, Region 5 experienced a strong price increase without losing ground in sales and acres sold. Most of the decline in sales statewide came from Regions 1 and 4. Sales were down slightly in Region 3, but acres sold were down 18.6 percent, more than any other region.

Note: Acres refer to total acres sold.
Source: Texas Real Estate Research Center

Source: Texas Real Estate Research Center

Overview and Outlook

While market activity is still well below pre-pandemic levels of 2017-19, the Texas rural land market is exhibiting stability overall. Though the total number of sales continues to decline, the total number of acres sold is holding up and showing remarkable resilience. Additionally, the overall statewide decline in price that our forecast model has been predicting has not yet materialized. In fact, after reaching a low of 1.64 percent YoY in fourth quarter 2024, price has increased its growth rate each quarter so far this year. Our latest forecast continues to indicate a decline in nominal price per acre over the next three years, but the indicated decline is more modest (less than 2 percent in total three years out), and it is predicting no meaningful change over the next few quarters.

Interest rates remain higher than they were most of the 15 years prior to 2023. This is likely the most prominent reason for the market slowdown, especially in combination with the historically steep rise in prices from late 2020 through 2022. Now, though we have more clarity on the national policy front, there are still concerns about economic growth and interest rates in the near term. It is probable that many potential market participants are holding out for lower interest rates, even if only by 50 basis points. Nonetheless, it seems like a significant retracement in prices, like what occurred in the mid-to-late ’80s and 2009-11 period, is unlikely.

Lynn D. Krebs, Ph.D. ([email protected]) is a research economist with the Texas Real Estate Research Center.