Real Estate

Texas Housing Market Stalls: Will Low Turnover Rates Reshape Your Investment Strategy?

Texas home turnover hits record lows due to affordability and economic uncertainty, impacting major metros.

byAndres Castro

November 2, 2025, 5:20 PM

Overhead drone view of a new suburban neighborhood's central amenities, including a swimming pool, clubhouse, and playground.

Overhead view of a new construction neighborhood showing the pool, playground, and picnic facilities. By Trong Nguyen.

Executive Summary

Texas’s housing market is experiencing its lowest home turnover rate in decades, driven by affordability and economic uncertainty, with major Texas metros seeing steep declines in sales activity.

A primary reason for the stalled market is that approximately 70 percent of U.S. homeowners are “locked in” by historically low mortgage rates, making it financially unfeasible to sell and purchase new homes at higher borrowing costs.

Despite considerable new construction in Texas, the market faces weak demand with twice as many sellers as buyers, giving hesitant buyers significant leverage for price negotiation.

The Trajectory So Far

Texas’s housing market is experiencing a historic slowdown in home turnover primarily because many current homeowners are “locked in” by historically low mortgage rates, making it financially unfeasible to sell and buy at today’s higher rates, while prospective buyers face near-record high home prices, rising property taxes, and economic uncertainty, leading to increased caution and weak demand.

Assessing Risk and Value

The historically low home turnover rate in Texas, driven by homeowners locked into low mortgage rates and persistent affordability challenges, signals reduced market liquidity and transaction volumes, posing risks to real estate-focused investments and related service providers. This environment, characterized by weak buyer demand and a surplus of sellers, grants significant leverage to buyers, potentially leading to price negotiations and downward pressure on valuations, thereby impacting investor returns and increasing holding period risks amidst economic uncertainty.

Expert Predictions and Forecasts

The Texas housing market is experiencing a historic slowdown and low turnover rate, primarily due to homeowners being “locked in” by historically low mortgage rates and buyers exercising increased caution amidst economic uncertainty and persistent inflation, leading to weak demand despite new construction.

Despite the overall caution, a modest rise in existing home sales and record median prices in September suggest that declining mortgage rates and a slight increase in inventory can offer temporary boosts to the market.

Texas’s housing market is experiencing its lowest home turnover rate in decades, with experts citing affordability and economic uncertainty as key drivers. Across the U.S., only 28 out of every 1,000 homes changed hands in the first nine months of 2025, a rate not seen since the early 1990s, according to a new Redfin analysis. Major Texas metropolitan areas are facing even steeper declines in sales activity.

Market Slowdown Hits Texas Metros Hard

The slowdown has been particularly dramatic in Texas. San Antonio, once a magnet for out-of-state buyers, saw its turnover rate plunge nearly 27 percent year-over-year, marking the biggest drop among the nation’s 50 largest metro areas.

Dallas, Houston, and Fort Worth were not far behind, all reporting double-digit declines in sales activity. Austin also experienced a significant drop, with only 22 sales per 1,000 homes, down 15.9 percent.

Factors Driving the Decline

A primary reason for the stalled market is that many homeowners are “locked in” by historically low mortgage rates. Approximately 70 percent of U.S. homeowners currently hold mortgage rates below 5 percent, significantly lower than today’s average of about 6.2 percent.

This disparity makes it financially unfeasible for many to sell their current homes and purchase new ones at a higher borrowing cost. Affordability is another major factor, as home prices across much of Texas remain near record highs, while property taxes continue to climb.

Buyers, meanwhile, are exercising increased caution amidst economic uncertainty and persistent inflation. Chen Zhao, Redfin’s head of economics research, noted that “America’s housing market is defined right now by caution,” with buyers frequently walking away from deals or delaying their search.

Listings and Demand Dynamics

While there has been a slight increase in new listings nationwide compared to recent lows, with 39 out of every 1,000 homes listed for sale through September, this figure remains about 25 percent below pre-pandemic levels. Most homeowners who do list their properties are reportedly testing the market rather than rushing to sell.

Despite the overall caution, the National Association of Realtors reported a modest rise in existing home sales in September, up 1.5 percent from August to a seasonally adjusted annual rate of 4.06 million, the fastest pace since February. Median prices also reached a record high for September at $415,200, suggesting that declining mortgage rates and a slight inventory increase can offer temporary boosts.

Implications for the Texas Market

For Texas, the market mirrors national trends, characterized by historically low transaction volumes. According to Zhao, while Texas benefits from considerable new construction, ensuring a healthy supply of homes, the main challenge lies in weak demand.

Currently, there are approximately twice as many sellers as buyers in the Texas market, giving hesitant buyers significant leverage. This dynamic allows for negotiation on prices, requiring sellers to be realistic about their expectations.