The Dallas-Fort Worth housing market is experiencing a significant cooling period, with a new analysis revealing that estimated values for a vast majority of homes have declined over the past year. Despite this recent dip, most homeowners in the region are still holding substantial equity from the market's rapid appreciation in previous years.
Data covering the period from October 2024 to October 2025 shows that approximately 87% of homes in the Dallas metro area saw a decrease in their estimated market value. This trend reflects a broader market normalization following a period of intense growth, with new construction and increased inventory giving buyers more options and negotiating power.
Key Takeaways
- An estimated 87% of homes in the Dallas metro saw their values decrease between October 2024 and October 2025.
- Nationally, 53% of homes experienced a similar decline in estimated value during the same period.
- Despite the dip, most Dallas homeowners have seen their property values increase by over 50% since their last purchase.
- New construction and a recovery in existing home inventory are contributing to price stabilization and improved affordability.
A Market in Transition
The recent downturn in estimated home values marks a notable shift from the heated market conditions of 2020 to 2022. The widespread decline in Dallas outpaces the national average, where 53% of homes saw their values fall over the same 12-month period. This adjustment is particularly prevalent in the South and West regions of the United States.
However, this correction does not erase the significant gains homeowners have accumulated over time. The median U.S. home was last purchased 8.6 years ago and has appreciated by 67.2% since that sale. In Dallas, the numbers are similarly strong, with a majority of homes having increased in value by more than 50% since they were last sold.
Understanding the Data
The analysis relies on Zillow's Zestimate, an automated valuation model that uses public records, MLS data, and user-submitted information to estimate a home's market value. The firm reports a nationwide median error rate of 1.83% for its estimates.
This long-term equity provides a substantial financial cushion for homeowners, meaning the recent dip in values is more of a market rebalancing than a widespread crisis for those who purchased their homes years ago.
New Construction Reshapes the Landscape
One of the primary drivers of the market shift in Dallas is a surge in housing supply, fueled by both new construction and an increase in existing homes for sale. According to Treh Manhertz, a senior economic researcher at Zillow, this influx has been crucial in stabilizing the market.
"Dallas has seen existing inventory fully recover from pandemic-era shortfalls. Now there are almost 13% more existing homes for sale there than we saw in 2018-2019," Manhertz explained.
He noted that Dallas's relative ease of building compared to other major metropolitan areas has allowed for a significant injection of new homes. "This injection of supply gave buyers options," Manhertz added. The increased supply has led to softer prices and given buyers more leverage in negotiations than they have had in recent years.
This market normalization is also translating into better affordability. "Mortgage payments are down nearly 6% from last year," Manhertz said, highlighting a positive trend for prospective buyers who have been sidelined by high costs.
Development Pushes Forward Across North Texas
While the residential resale market adjusts, new development projects continue to break ground across North Texas, signaling long-term confidence in the region's growth. Several major projects are moving forward, from downtown Dallas to the northern suburbs.
Downtown Dallas Land Opportunity
A prime 0.67-acre site at 1823 Cadiz Street is currently on the market for nearly $8.5 million. Located near the Kay Bailey Hutchison Convention Center, which is undergoing a multi-billion-dollar renovation, the property is zoned for multifamily, hotel, office, or mixed-use development.
New Communities in Denton and McKinney
In the northern suburbs, development is booming. Plano-based Highland Homes is set to begin sales in Landmark, a large mixed-use community in Denton developed by Hillwood. The new homes will range from 2,200 to 3,600 square feet, with prices starting in the high $500,000s. A model home is expected to open in early 2026.
Further east in McKinney, Republic Property Group has initiated work on Wildwood, a massive 1,800-acre master-planned community. The project represents one of the last large tracts of land available for development in the city. The initial phase involves constructing a 3.8-mile extension of Laud Howell Parkway, a key piece of infrastructure expected to be completed in late 2027. The community will eventually include a mix of residential, commercial, and office spaces.
The Outlook for Buyers and Sellers
The current Dallas-Fort Worth real estate market presents a mixed but ultimately normalizing picture. Sellers can no longer expect the rapid, multiple-offer scenarios that were common two years ago, but most are still in a strong equity position.
For buyers, the landscape has improved significantly. More inventory means more choices and less pressure to make rushed decisions. The slight dip in prices, combined with a modest decrease in mortgage payment costs, is creating a more favorable environment for entering the market.
The ongoing development across the metroplex indicates that developers and builders are betting on the long-term appeal of North Texas. As the market finds its new equilibrium, the balance between supply and demand appears to be shifting toward a more sustainable and healthy state for all participants.
