The housing market in Texas is constantly up and down and that likely won't stop in 2025.
Certain policy changes that President Trump wants to get through will certainly have an impact on the market starting this year. The housing market this year may be more favorable than in 2024 or some years past too.
Despite a few rate cuts by the Fed in the past few months, the average 30-year mortgage rate has risen to 7.08% as of early January. According to Redfin, the median sale price nationally on a home was just over $427,000 as of December 2024. U.S. home prices were up 6.2% compared to last year.
In Texas, the median sale price of a home was $350,600 in December, up 2.6% compared to a year prior. Some real estate experts predict home prices will come down in the major metropolitan areas across Texas this year. Houston-based real estate agent Matthew Villaflor agrees, although he doesn't expect prices to drop by much.
"I don't expect them to drop dramatically," he said of local housing prices. "We'll have different sectors of the market that you'll see some decline in the prices, but overall, real estate generally increases in value."
Inventory is still relatively low too. The higher prices and slower construction have kept a lot of people from buying their first home. Plus, a lot of homeowners were able to lock in a low interest rate during the covid years, so they're not looking to move yet, if at all.
"If the interest rates come down far enough then it would compel more people to move if it makes sense for them," Villaflor added, who's also projecting a balanced market this year between buyers and sellers.
Houston, like Austin and Dallas, saw a booming housing market during the pandemic. Now, it's forecasted that these major cities could see home prices drop after a time of remarkable price appreciation. First-time homebuyers especially are hoping to see mortgage rates come down and inventory levels go up in 2025.
"The more inventory levels we have, that will kind of bring the home prices down, but they are still pretty lean right now and that will keep the house prices steady," said Villaflor.