Will Texas Home Prices Rise or Fall in 2025?

After several years of unpredictable ups and downs, many home buyers in Texas want to know what home prices will do in 2025.

And that’s logical. After all, nobody wants to buy a depreciating asset that might result in equity losses going forward. So let’s tackle this thorny question.

In a hurry? Here are five key points covered in this guide:

1. Realtor.com predicted prices would rise in 2025 for all major Texas metros.
2. They expect steady growth for Austin, Dallas, Houston, San Antonio, etc.
3. Zillow expects prices to remain mostly flat in 2025, except for El Paso. 
4. We lean toward the lower end and anticipate only modest gains.
5. El Paso could see the biggest price growth in 2025, and Austin the lowest.

Realtor.com: Texas Home Prices Will Rise in 2025

In December 2024, Realtor.com published a housing market forecast for the nation as a whole along with the 100 largest metro areas. They expect home prices across the U.S. to rise in 2025. 

To quote their report:

“Realtor.com®’s forecast predicts home sale prices will grow by 3.7%, mortgage rates will stay above 6% and rents will remain virtually unchanged (-0.1%).”

The above prediction pertains to the nation as a whole. Here are their 2025 home price forecasts for the six largest metro areas in Texas:

• Austin-Round Rock: +10.2%
• Dallas-Fort Worth-Arlington: +9.2%
• El Paso: +8.4%
• Houston-The Woodlands: +7.3%
• McAllen-Edinburg-Mission: +7.0%
• San Antonio-New Braunfels: +10.0%

Some of these predictions seem a bit bullish. In the Austin metro area, for example, home values were still falling at the end of 2024 and had been since mid-2022. So it’s hard to imagine them rising by 10% in 2025, as Realtor.com predicts.

According to their report, the company uses “data on the housing market and overall economy to estimate values for these variables for the year ahead.”

A More Conservative Outlook From Zillow

Researchers from Zillow offered a more conservative (and arguably more realistic) outlook for home prices in Texas. They expect modest gains in 2025, with the Austin area dipping slightly.

The following table shows the median home values for Texas’s major metro areas at the end of 2024, based on Zillow’s data. It also shows their price forecast for 2025. 

Metro	Dec. 2024 Median	2024 Movement	2025 Forecast
Austin-Round Rock	$444,248	-3.6%	-0.4%
Dallas-Fort Worth	$368,683	-0.1%	+1.0%
El Paso	$223,587	+3.4%	+3.7%
Houston-The Woodlands	$306,191	+0.4%	+0.6%
McAllen-Edinburg	$188,228	+2.7%	+4.2%
San Antonio-New Braunfels	$280,603	-2.4%	+0.3%

Ultimately, we have to take these predictions for what they are: an educated guess. But the key takeaway here is that economists see positive growth in 2025, across most of Texas.

Long Term, Texas Home Values Hold Up Well

Statistics show that most people who buy a home stay in it for at least a few years. So, from an investment standpoint, it’s wise to think about the long-term potential for appreciation.

And from a long-term perspective, home prices in Texas tend to rise steadily over time.

For instance, the S&P CoreLogic home price index for the state of Texas only shows one significant downturn over the past 20 years. That was the post-pandemic home price decline that occurred during 2022 – 2023 (and affected most cities across the U.S.).

Aside from that anomaly, house values in Texas have risen gradually for decades, making it one of the most stable markets in the U.S. from an investment standpoint.

The Most Likely Scenario for 2025

We analyzed Texas housing market trends for the past several years, along with historical patterns for home price growth and various supply-and-demand factors.

Based on that, the most likely scenario for 2025 is that home prices will rise modestly in most Texas cities, but with a couple of outliers.

• Statewide, we expect home values to rise 2% – 4% in 2025.
• The El Paso metro area could see bigger gains due to strong demand.
• The Austin metro area could continue to decline into the second half of 2025.

We’ve singled out Austin several times in this report. So let’s zoom in now to take a closer look at what’s happening in Central Texas.

The Austin Anomaly: Prices Still Falling

As you probably already know, the Austin area was one of the so-called “pandemic boomtowns” that experienced a surge in demand and skyrocketing home prices from 2020 to 2022.

Since then, however, prices have been falling steadily in the state capital.

As of December 2024, Austin is one of the few major metros in the U.S. that is still experiencing a steady decline in prices. Most other metros experienced a shorter downturn that’s already in the rearview mirror.

You can see Austin’s rollercoaster history in the following chart, which is based on data provided by Zillow.

Our prediction for the Austin area is that home values will continue to decline gradually into the second quarter of 2025, at which point they will “bottom out” and turn north again.

This is a big concern for Austin-area home buyers, and rightfully so. Nobody wants to purchase a home only to see its value drop going forward.

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10 Frequently Asked Questions From Buyers

Below, we’ve addressed some common questions relating to home price trends in the state of Texas, drawing from recent data and market analysis.

1. Did Texas home prices rise or fall during 2024?

Statewide, Texas home prices remained flat over the past year. But at the city or metro level, the results were more mixed, with some markets actually declining in value. In short, no Texas cities experienced significant home price growth in 2024.

2. What’s the general outlook for 2025?

Home price projections for the state of Texas vary greatly. There does not seem to be any consensus or commonality among forecasters. We believe the most likely scenario is modest gains for most cities during 2025, with some exceptions for stronger or weaker markets.

3. What factors are driving these trends?

House values rise or fall due to many factors, but it mostly comes down to supply and demand. When there’s a shortage of homes but a lot of qualified buyers, prices tend to rise. When there’s a surplus of properties for sale and/or weaker demand from buyers, values tend to drop.

In 2025, Texas home price trends will be heavily influenced by (A) supply gains that have occurred over the past two years and (B) steady population growth in most metros.

4. How do prices in Texas compare to the rest of the U.S.?

Generally speaking, Texas housing markets are relatively affordable when compared to other parts of the country. At present, the statewide median home value in Texas is roughly $55,000 less than the national median.

5. How can I research these trends in my local area?

Doing some local housing research will help you navigate the market and make a smart offer on a house. You can find this kind of information through Zillow, Realtor.com’s monthly housing reports, and Redfin’s interactive data center.

Pay particular attention to recent sales prices in your area, as these show what the market is like right now. This information can help sellers determine their asking price and help buyers make a smart offer.

6. Are there any seasonal trends I should know about?

The market typically experiences a peak buying season from April through June, with high activity and increased prices. But activity gradually slows from July through September, and prices drop slightly.

The market slows further during the winter months, providing more opportunities for buyers. That being said, it can be hard to predict or “time the market.”

7. Is Texas real estate considered to be a good investment?

Homes located in the state of Texas tend to hold their value well over time, and they usually increase in value from one year to the next. Occasional anomalies like economic recessions can cause a temporary decline in home prices. But the long-term trend for Texas is mostly positive.

8. What renovations or upgrades can increase my home’s value?

Energy-efficient upgrades are generally a good investment in Texas, given the hot climate. This includes new windows, improved insulation, updated HVAC, etc.

Kitchen and bathroom remodels tend to add value as well, especially if you add desirable features. Outdoor living spaces are also a big draw in Texas, especially outdoor kitchens and entertaining areas.

9. How do rising or falling home values affect my property taxes?

In Texas, property taxes are directly tied to a home’s appraised value. These taxes are used to fund schools, government services, infrastructure and more. When home values rise, your property’s appraised value likely increases as well, leading to higher property taxes.

Texas also has certain exemptions and limitations that can help mitigate the impact of rising home values on your property taxes, such as the homestead exemption.

10. Do school district ratings influence home values?

Yes, school district ratings significantly influence home values in Texas, as they do across much of the United States. Families with children often prioritize living in areas with highly-rated schools, driving up demand and house prices in those preferred districts.

This effect is particularly pronounced in Texas, a state that invests heavily in public schools.

Even buyers without children can be attracted to good school districts, recognizing that these areas often maintain strong property values and resale potential. School district ratings and popularity are a crucial factor for both buyers and sellers in the Texas real estate market.

Disclaimer: This report includes forecasts issued by third parties not associated with the publisher. The Home Buying Institute (HBI) makes no claims about future home prices or other real estate-related trends.