Dallas-Fort Worth Housing Market Cools with 3.3% Price Drop Amid Rising Inventory

Dallas-Fort Worth Home Prices Drop 3.3% as Market Cools

The Dallas-Fort Worth (DFW) housing market is undergoing a notable transition, marked by a 3.3% year-over-year decline in median sale prices, the fifth-largest decrease among major U.S. metros. This trend is accompanied by rising inventory levels and properties selling below asking price on average. Homes are now taking approximately 70 days to sell, a significant increase from the rapid sales during the pandemic. These changes signal a broader shift in buyer sentiment and affordability issues, affecting the region's real estate dynamics. According to the M&D Real Estate, these developments hint at a more balanced market, allowing buyers to exercise greater caution and negotiate more favorable terms.

Inventory Surges 30% Year-Over-Year in Dallas

The DFW area has experienced a remarkable surge in housing inventory, increasing over 30% year-over-year. This rise has elevated the supply to 5.4 months, the highest since 2003, according to M&D Real Estate. This increased availability provides buyers with more options and alleviates the intense competition seen in previous years. By contrast, the Texas state inventory jumped 30.7%, as noted by Ramsey Solutions, which is consistent with the trend across North Texas. The increased inventory is a significant factor in the cooling of the market, giving buyers more negotiating power and reducing the urgency to bid over asking prices.

Home Sales See Extended Closing Times as Buyer Habits Shift

Homes in North Texas are now averaging 57 days on the market before selling, according to M&D Real Estate. However, within the broader Texas market, the median time to close has stretched to 105 days in the first quarter of 2025 as per Ramsey Solutions. This change reflects a shift in buyer behavior, where prospective homeowners are taking more time to evaluate their purchasing options amidst fluctuating mortgage rates, currently ranging between 6% to 7% as noted by LendFriend. This extended timeline signifies a return to a more cautious approach, contrasting sharply with the pandemic-era rush to secure properties quickly.

Median Home Prices in Dallas Drop by 5.5%

In May 2025, Dallas City reported a median sales price of $515,000, representing a 5.5% decline from the previous year. This price adjustment, highlighted by Dallas City Housing Market Update, suggests a cooling demand and an adjustment period following years of price escalation. The area's active listings rose from 2,371 last year to 3,058, indicating increased seller activity amid stabilizing market conditions. These fluctuations are aligned with broader trends seen across major U.S. markets, where affordability issues and economic uncertainties are reshaping buyer power and market dynamics.

Expert Opinions on the DFW Housing Trend

Experts predict that the DFW housing market will continue to see stable prices and increased buyer options through the rest of 2025. According to the Ramsey Solutions, as interest rates stabilize, buyers can expect more conditions favoring them. Maya Tarek, Senior Analyst at RealEstateAbroad.com, notes, "The current market conditions allow buyers to re-enter the market with less urgency and more bargaining power, making it a suitable time for strategic investments." This perspective aligns with the notion that the market is moving towards a more sustainable equilibrium, a sentiment echoed by local real estate professionals.

"The current market conditions allow buyers to re-enter the market with less urgency and more bargaining power, making it a suitable time for strategic investments."

Future Implications for the Dallas Real Estate Market

Looking ahead, the Dallas-Fort Worth housing market is set to experience continued shifts towards a more balanced state, potentially benefiting long-term investors. As inventory levels rise and prices stabilize, the potential for strategic acquisitions grows. Despite current cooling trends, the DFW region's historical economic growth and infrastructure developments remain attractive to investors. Analysts project that if interest rates remain stable and inventory continues to grow, the market will offer significant opportunities for those looking to invest in this dynamic city. RealEstateAbroad.com will continue to monitor these developments, providing insights into optimal investment strategies.