2025 Year in Review: Texas Real Estate Market Trends & 2026 Predictions
A look back at the 2025 Texas real estate market, from cooling prices and rising inventory to tighter flip margins and more foreclosures, and what it suggested for 2026.
Written at the end of 2025. Market conditions change quickly. For current local data, talk to an agent or check recent sales in your area.
2025 was a year of adjustment for Texas real estate. Prices cooled in several metros, inventory rose, and buyers who could pay cash had an edge. Here's a look back at the main trends and what they suggested for investors heading into 2026.
The big picture: a market favoring cash buyers
Mortgage rates stayed well above the lows of a few years earlier for all of 2025. That kept many traditional buyers, especially first-time buyers, on the sidelines. National surveys showed first-time buyers making up a record-low share of purchases, and they were older on average than ever.
Investors and cash buyers filled part of the gap. Without a financing contingency, a cash offer was often the most attractive one a seller received.
What it meant for wholesaling: steady demand from investors who wanted deals they couldn't find on the MLS.
Texas markets in 2025
Dallas–Fort Worth
Prices were roughly flat to slightly up in much of the metro, while inventory rose and homes took longer to sell than in the peak years. Buyers gained more negotiating room. Suburban areas with strong job growth held up well.
Houston
Prices were relatively stable, and inventory grew. Rising homeowners insurance costs, especially after recent storms, became a real factor in affordability and in investors' cash flow math.
Austin
Austin continued to work through the correction from its 2022 peak. Prices stayed well below their highs, inventory remained elevated, and price cuts were common. That created more opportunities for buyers after years of intense competition.
San Antonio
San Antonio remained comparatively affordable with steady rental demand, making it popular with buy-and-hold investors focused on cash flow.
Flipping: tighter margins
Flipping stayed profitable for disciplined investors, but margins were thinner than in the boom years. Higher purchase prices, higher financing costs, rising labor and material costs, and longer days on market all ate into profits.
Who still did well: investors who bought well below market, had reliable contractors, kept renovations to what buyers in the area would pay for, and moved quickly.
Foreclosures rose from historic lows
Foreclosure activity increased nationally in 2025, though it remained low by historical standards. Rising insurance and tax costs, higher payments on some loans, and general cost-of-living pressure all played a part. Texas, as a large state with fast non-judicial foreclosures, consistently saw a significant share of filings.
What it meant: more pre-foreclosure and distressed opportunities for investors and wholesalers who reach owners early and treat them fairly.
Wholesaling stayed active
Demand for off-market deals stayed strong as investors looked for buys they couldn't find on the MLS. At the same time, more people entered wholesaling, and buyers became more selective about inflated ARVs and thin margins.
Wholesalers who did well: those with accurate numbers, real buyer relationships, and clear disclosure that they were selling a contract interest.
What we learned in 2025
Cash and certainty win. Sellers favored offers that wouldn't fall through.
Fundamentals matter. Areas with job and population growth held up better.
Local investors stayed active. Small and mid-sized investors remained a big part of the buyer pool.
Off-market still matters. With more MLS inventory, the best discounts still came from motivated sellers reached directly or through wholesalers.
Discipline protects margins. Accurate ARVs, realistic repair budgets, and reliable contractors made the difference.
What we expected for 2026
These were our expectations at the end of 2025, not guarantees:
- Mortgage rates: likely to stay elevated compared with the pandemic years, which keeps cash buyers at an advantage.
- Prices: modest changes, varying by market. Areas with strong job growth were expected to hold up best, while markets still working through corrections might stay flat.
- Investor activity: likely to remain a significant share of purchases while traditional buyers face affordability challenges.
- Foreclosures: likely to keep rising gradually from low levels.
- Inventory: likely to stay higher than in recent years, giving buyers more choice and negotiating room.
- Wholesaling: likely to stay strong but more competitive, rewarding wholesalers with accurate numbers and solid buyer relationships.
Opportunities for 2026
Flippers: focus on distressed properties, keep renovations to what local buyers will pay for, and build a dependable contractor team. Speed protects margins.
Buy-and-hold investors: look for properties that cash flow from day one, particularly in more affordable markets, and consider BRRRR to recycle capital. Budget realistically for Texas property taxes and insurance.
Wholesalers: keep building your buyer list, focus on motivated sellers, provide accurate comps and repair estimates, and always disclose your contract interest. See our guide to Texas wholesaling laws.
Risks to watch
- A weaker job market, which would reduce demand
- Higher insurance costs, which affect both affordability and rental returns
- Rates rising again if inflation picks back up
- New construction competing with resales in fast-growing suburbs
- Thinner margins pushing less disciplined investors out of the market
The bottom line
2025 rewarded investors who bought with discipline, kept cash reserves, and built strong teams. Those habits matter in any market.
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