Texas Housing Inventory, Listings Jump as Rates Tick Down

Could the worm finally be turning for homebuyers in the Lone Star State? The latest Texas Quarterly Housing Report suggests that might just be the case, with little hints of a rebalancing of power in the housing market.

Texas Realtors dropped its Q3 report on Tuesday, and while home prices didn’t see any significant movement downward this past quarter, the number of active listings shot up 20.9% year-over-year.

Meanwhile, inventory grew to 5.5 months, up from 4.7 in Q3 of 2024. And the average home spent 63 days on the market, seven days more than the same period last year. Factor in days to close and the difference only shrinks by a day. As for the median price, it fell by 1.5% to come in at $335,000. Closed sales saw a bump of 4.9%, though.

You’ll find different parameters for a balanced housing market out there (4-6 months of inventory, 5-7 months of inventory, etc), but the Lone Star State landed comfortably in consensus range last quarter, a welcome signal to prospective buyers who have endured years of sellers in the driver’s seat.

“Continued demand, largely stable prices, and increasing availability point toward a healthy real estate environment in our state,” said Christy Gessler, chair of Texas Realtors.

Zoom in on the D-FW area and you see the metro mirrored statewide trends, clocking a sharp 18.6% spike in active listings and growing inventory from 4 months in Q3 2024 to 4.6 months last quarter. Homes in the Metroplex took an average of 59 days to sell and 32 to close, nine more year-over-year.

The housing report shows D-FW’s closed sales jumped by 3.7%, and the median sale price ticked down to $392,000 for a 0.8% dip.

Lower interest rates are expected to stimulate even more activity in the quarters ahead. Last Thursday, the 30-year mortgage hit its lowest mark since the start of 2025, coming in at 6.19%, nearly a whole percentage point down from mid-January, according to Freddie Mac.

More relief may be on the way with the Federal Reserve’s latest benchmark interest rate cut. On Wednesday, the central bank issued another quarter-point reduction — the second in as many meetings — bringing the benchmark range to the lowest it’s been in three years. Mortgage rates aren’t directly tied to the Fed’s benchmark, but they tend to follow its trajectory by way of certain investor behaviors.

Unfortunately for those hoping for even looser monetary policy in the near-term, Jerome Powell, the Fed’s chair, suggested a third consecutive cut wasn’t necessarily in the cards.

“A further reduction in the policy rate at the December meeting is not a foregone conclusion — far from it,” he said at a press conference. “Policy is not on a preset course.”

Fair enough. The central bank is currently flying blind with regard to economic data because of the ongoing federal shutdown. Market and labor reports apparently don’t qualify as essential functions of the federal government.