Homebuilders in North Texas reduced new construction activity in 2025, responding to lower demand and increasing housing inventory, according to a report from Residential Strategies. The Dallas Business Journal reported that there were 8,386 housing starts in the Dallas-Fort Worth area during the fourth quarter of 2025, representing a 17.7 percent decline compared to the same period the previous year. For the entire year, builders began construction on 41,222 homes for sale, down 12.3 percent from 46,991 in 2024.
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.”
Existing home sales offered limited improvement. Over the twelve months ending November 2025, existing home sales in North Texas rose by just 1.4 percent while listings increased by more than 12 percent to reach 32,300 properties available for purchase, based on data from the Texas A&M Real Estate Center.
The slowdown comes amid weaker economic growth in the region. According to figures from the Texas Workforce Commission, job creation in Dallas-Fort Worth slowed considerably last year with only 18,000 net new jobs added in 2025. This contrasts with an average of about 95,000 jobs added annually between 2010 and 2023.
Builders are also managing a significant supply of land. By the end of last year, North Texas had approximately 110,000 vacant developed lots and another estimated 68,000 lots under development or planned for future use.
Residential Strategies noted some early signs of increased buyer interest heading into this year but cautioned that this might not result in higher profits for builders as prospective buyer traffic 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 in the report. He added these factors have affected builder profit margins.
At the end of December 2025 there were about 12,317 finished vacant homes on the market—an increase from earlier quarters—prompting many builders to further slow new construction and reduce prices on existing inventory. Closings reflected similar trends: builders closed on approximately 10,473 homes during Q4 (a decrease of around five-and-a-half percent compared to Q4-2024), while annual closings dropped from nearly 48,000 homes in 2024 to about 45,000 last year.
