Homebuilders in North Texas reduced new construction activity throughout 2025 as demand slowed and inventory increased, marking a shift toward a buyer’s market. This trend is highlighted in a recent report from Residential Strategies, a company specializing in residential market research.
According to the Dallas Business Journal, builders in the Dallas-Fort Worth (DFW) area started work on 8,386 homes during the fourth quarter of 2025, representing a 17.7 percent decrease compared to the same period in the previous year. For all of 2025, home starts totaled 41,222 for-sale homes—a drop of 12.3 percent from 46,991 in 2024.
“It is very clear that builder profits will be much lower in 2026 compared to 2025, as DFW remains a buyer’s market,” said Ted Wilson, principal at Residential Strategies.
The resale housing market has seen only minor improvement. Existing home sales in North Texas rose by just 1.4 percent over the year ending November, while listings increased by more than 12 percent to reach approximately 32,300 properties, according to data from the Texas A&M Real Estate Center.
This slowdown coincides with weaker economic growth across the region. The DFW metro added about 18,000 net new jobs in 2025—significantly fewer than the average of roughly 95,000 jobs added annually between 2010 and 2023, based on figures from the Texas Workforce Commission.
Builders are also dealing with an oversupply of land. At the end of last year, North Texas had about 110,000 vacant developed lots and another 68,000 lots still being developed, according to Residential Strategies.
The firm observed some early signs of increased prospective buyer traffic heading into this year but noted that these do not necessarily lead to higher profits. Prospective buyer visits stabilized at the end of last year.
“Builders have been able to sell to a backlog of pent-up demand in DFW, but affordability challenges have required price discounting, rate buy-downs, and other incentives,” Wilson said. He noted that these strategies have reduced profit margins for builders.
By year-end, there were about 12,317 finished vacant homes in DFW—a slight increase from the previous quarter—which supported builders’ decisions to slow new starts and reduce prices on existing inventory. Closings mirrored this trend: builders closed on about 10,473 homes during the fourth quarter of last year—a decline of around 5.5 percent compared with a year earlier. For all of last year, closings dropped to approximately 45,000 homes versus nearly 48,000 in the prior year.
