Texas housing inventory exceeded pre-pandemic levels by 35 percent in February

COLLEGE STATION, Tex. (Texas Real Estate Research Center) – The Texas housing market continued to react to affordability challenges and economic headwinds in February 2025, according to the latest Texas Housing Insight report published by the Texas Real Estate Research Center (TRERC).  

Statewide, home sales ranked among the lowest for any February since 2019, underscoring the impact of high mortgage rates and cautious buyer behavior. 

The rise in housing inventory remains a central theme, with February marking the 13th consecutive month of year-over-year inventory growth at a pace of 30 percent. Current inventory levels now sit approximately 35 percent above pre-pandemic figures, creating more favorable conditions for buyers but simultaneously applying downward pressure on home prices. 

“Buyers today have more choices and more time to make decisions, but affordability remains a challenge,” said TRERC Research Economist Yanling Mayer, Ph.D. “The continued increase in inventory is a sign of cooling demand, and it’s reshaping the market dynamic across Texas.” 

Regionally, the picture is mixed. Austin’s home prices appear to be approaching a stable bottom, with the pace of decline moderating in recent months. In contrast, Houston continues to show steady home price growth for the 16th month in a row, although without signs of acceleration. 

New home construction, a long-standing strength in the Texas market, has slowed, with statewide building permits down 6.7 percent from a year ago. Builder confidence is eroding amid rising material costs and renewed concerns over global supply chains following recent tariff implementations. 

“Despite these headwinds, Texas remains a national leader in new home construction, continuing to offer relatively affordable housing options,” Mayer said. 

Elevated inflation expectations and volatile bond yields are further complicating the housing outlook. Fluctuations in the 30-year mortgage rate have likely caused many potential buyers to delay their home purchase plans, hoping for more stable or favorable conditions. 

Read the February 2025 Texas Housing Insight report online. 

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