Homebuilders in North Texas reduced new construction throughout 2025 as demand weakened and available inventory increased, according to a report from Residential Strategies, a market research firm. The Dallas Business Journal noted that home starts in the Dallas-Fort Worth area reached 8,386 in the fourth quarter of 2025, marking a 17.7 percent decrease from the same period in 2024. Over the entire year, builders began construction on 41,222 for-sale homes, which is down 12.3 percent from the previous year’s total of 46,991.
Ted Wilson, principal at Residential Strategies, stated in the analysis: “It is very clear that builder profits will be much lower in 2026 compared to 2025, as DFW remains a buyer’s market.”
The existing home sales market has seen little improvement. Sales rose just 1.4 percent over the year ending November while listings increased by more than 12 percent to reach 32,300 properties on the market. This data comes from the Texas A&M Real Estate Center.
The slower pace of housing activity coincides with weaker economic growth in the region. The Dallas-Fort Worth area added only about 18,000 net new jobs in 2025 according to figures from the Texas Workforce Commission. This is significantly less than the roughly 95,000 jobs added annually between 2010 and 2023.
Builders are also managing a large supply of land ready for development. At the end of last year there were approximately 110,000 vacant developed lots and another estimated 68,000 lots still being prepared for future building.
Residential Strategies indicated some early signs of increased interest among buyers heading into this year but cautioned that these trends may not immediately improve profits or lead to higher margins.
Wilson explained: “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,” adding that such measures reduce profit margins.
By year-end there were over 12,300 finished vacant homes in Dallas-Fort Worth—slightly more than at the end of the prior quarter—which supported decisions by builders 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 (a decline of 5.5 percent compared with one year earlier), and annual closings dropped to around 45,000 compared with nearly 48,000 reported for all of last year.
