Economic uncertainty is slowing sales and construction for homebuilders in North Texas, requiring steeper price cuts to attract buyers, a new report shows.
Builders in the Dallas-Fort Worth metropolitan area started 12,205 homes in the second quarter, essentially flat compared to the 12,262 starts in the second quarter of 2024, according to the Residential Strategies consulting firm.
The annualized pace fell 6% to 45,517 units, down from 48,401 a year earlier.
Late last year and early in 2025, builders discounted houses 4% to 6% to maintain sales paces, noted Ted Wilson, principal at Residential Strategies.
“However, in the wake of consumer uncertainty stemming from April’s tariff announcements, many builders reported that sales have fallen 20-30% in recent months despite even more extensive discounting,” he said in a statement.
Meanwhile, North Texas builders sold 12,570 homes in the second quarter, a 5% decline from the same quarter of 2024. The annual sales rate fell 2.5%, to 46,372 units.
Homebuilder sentiment softens nationally
“Despite the ongoing slowdown in the DFW housing sector, 2025 activity will be one of the top 10 years for new home closings,” Wilson said.
Nationally, homebuilder sentiment in June dropped to one of its lowest points in more than a decade, while the National Association of Home Builders forecasts fewer new home sales in 2025 than in 2024.
Still, Residential Strategies and other analysts point to the inherent advantage that builders have over existing sellers in offering incentives, such as mortgage-rate buydowns.
"Builders can be more responsive with pricing and financing solutions, while resale sellers must compete on value — offering move-in ready homes, desirable locations and competitive pricing," Odeta Kushi, deputy chief economist at financial services firm First American, told Homes.com this month.
In North Texas, rising land prices and higher costs, caused in part by builders having to buy down mortgage rates for buyers, have lowered profit margins, according to the Residential Strategies report. Some markets, especially those in the southern and outer-ring areas, have posted sharper declines in sales and profits, the report said.
“Many builders continue to take a ‘spec’ approach to home construction — initiating construction on a home before it is sold,” said Cassie Gibson, executive vice president of the consulting firm, in the statement.
While the strategy is financially advantageous, it has also led to a buildup of finished vacant inventory over the past few quarters, she noted. At the end of June 2025, there were 11,087 finished vacant for-sale homes in the Dallas market, representing a 2.87-month supply, higher than the typical equilibrium range of two to 2.5 months, Gibson said.
One of the concerns for North Texas builders is the easing of job growth across the region, according to the report that cited Texas Workforce Commission figures. From 2010 to 2024, Dallas-Fort Worth averaged 94,267 new jobs added per year, an annual growth rate of 2.69%, but the rate now is 1.10%.
“The pace of domestic relocation to Texas has slowed dramatically over the past two years and this has adversely affected local job growth,” said Ned Wilson, Residential Strategies' senior vice president, in the statement. “While a move to Texas may be very attractive to companies and individuals, those that have existing mortgages near 3% are hesitant to replace those with a 7% mortgage — the math just doesn’t work.”