The real estate market forecast fluctuates depending on national and regional trends, the economy, and other factors that sometimes make long-term predictions inaccurate. However, as Q4 approaches, forecasters are beginning to predict what could happen across Texas and the broader US throughout the rest of 2024 and into 2025—and why.
We’ve made it easy to learn more about Lone Star and national market trends, predictions, and influences so you can go into 2025 armed with the most knowledge about buying and selling. So, whether you’re looking to purchase or sell land in Texas or beyond, take a look through our comprehensive guide to get started.
End-of-Year Real Estate Market Forecast 2024
The national real estate market is changing slightly in the last quarter of 2024. In September, the Federal Reserve cut the federal funds rate by half a percentage point—and while that’s different from mortgage rates, they trend similarly. Following rate cuts, borrowers can more easily access capital, which means we may see land prices rise due to increased competition.
However, looking at reports on farmland values, we can estimate that national land values may be slowing their growth. Farm real estate (including buildings) rose in value by 5% and cropland by 4.7% since 2023, but these national growth rates have fallen year-over-year (YoY) from 7.4% and 8.1% in 2023 and 12.4% and 14.3% in 2022, respectively. Combined with the USDA projecting contractions in farm income for a second year running, farmers buying less land, and the lack of land supply, this trend suggests that rural land prices may hold relatively steady.
With that said, home prices still sit at record highs as of early September, which keeps them out of reach for many potential buyers. Here are some other Q4 real estate facts:
- Most properties take about 22 days on the market before selling, which is also higher than in previous years.
- There is an increase in inventory of properties for sale, but it’s still generally too low to accommodate buyer demand.
- Interest rates have peaked in 2024 and will likely fall and plateau.
- The median home price of over $426,000 as of June 2024 is the highest recorded average.
Many experts—like those at Freddie Mac—predict a slight increase in housing demand in the rest of 2024 but a lack of inventory due to high prices.
The Texas Outlook for 2024’s Remainder
Examining the same 2024 USDA land market metrics explored above, Texas purports:
- Farm real estate – Lower than US average values ($2,800/acre in Texas compared to $4,170/acre nationally) but higher than US average YoY growth (7.3% in Texas compared to 5.0% nationally)
- Cropland real estate – Much lower than US average values ($2,570/acre in Texas compared to $5,570/acre nationally) and much lower than US average YoY growth (3.2% in Texas compared to 4.7% nationally)
- Pasture real estate – Higher than US average values ($2,200/acre in Texas compared to $1,830/acre nationally) and higher than US average YoY growth (6.3% in Texas compared to 5.2% nationally)
Per Texas A&M’s Texas Real Estate Research Center (TRERC), the Texas land market largely looks set to hold steady through the year’s end and maintain 2023 prices. However, TRERC also reports that Texas’ volume of land sales continues to struggle with declining numbers, and land values may vary significantly based on state region:
- Panhandle and South Plains: Slight growth
- West Texas: Decline
- Northwest Texas: Slowed growth
- Austin-Waco-Hill Country: Strong rebound
Key Factors Driving the National and Texas Markets
The real estate market is affected by several factors, ranging from politics to inflation and consumer behavior. Some of the biggest influences include:
- Mortgage rates – While mortgage interest rates are declining, there’s not enough real estate inventory to affect the market too much. That means prices are higher, making it difficult for the average buyer to purchase their desired property or home. However, Texas mortgage rates remain below the US average, which may incentivize more land and home purchases than seen elsewhere in the country.
- Inflation – Generally, inflation had been reaching record levels until recently. As a result, the Federal Reserve raised the federal funds rate to try and counteract it, which increased mortgage rates, too. With inflation reaching a peak and declining, mortgage rates can also start going down.
- Inventory – Despite inflation and mortgage rates decreasing, there is a low supply of available homes and land right now. Without a healthy housing supply, the benefits of lowered inflation and mortgage rates are pushed to the side.
As you can see, each of these factors plays a role in the others, making them all crucial for predicting the outlook for the real estate market.
In Texas specifically, the inventory challenges become further exacerbated by the considerable migration to (and from) the state—such as the swaps between Texas and California in 2021 that saw the former net over 70,000 new people from the Golden State. Yet TRERC reports job growth slowing in Texas throughout 2024, which may lead to a less active market—both from fewer relocations to the state and consumers tightening finances out of concern.
Other Influences on the Housing and Land Market
Other effects on the real estate forecast for the end of 2024 and the beginning of 2025 relate to politics and consumer behavior. Examples of these issues include:
- Political instability – With political issues worldwide, including the United States, consumers may feel inclined to hold off on buying homes or land. Instead, they’ll likely wait until politics feel more steady.
- AI – As AI continues to rock our world, some people may feel concerns about whether it will take their jobs and cause layoffs. They may decide to hold off on buying a home or land until they feel more security in their jobs.
- Climate change – Changing weather patterns, more severe storms, and higher temperatures can also affect how quickly and where a buyer wants to move. Given Texas’ location within and adjacent to deserts, climate change will likely affect the state’s land market considerably over the coming decades.
- Hybrid work – Despite return-to-office mandates, many people prefer remote or hybrid work schedules. Having one of these jobs can encourage people to look for houses further away from their office.
These factors, inflation, housing inventory, and mortgage rates, play a significant role in buying and selling property in 2024 and 2025.
2025 Land and Housing Market Predictions
How 2025 pans out will depend quite heavily on the factors above, with experts providing several different predictions for the market.
Looking beyond land, here are some of the current national estimates:
- The ResiClub average of all public experts’ predictions suggests that home prices will rise about 2.5% in 2025.
- Other experts predict no major price changes in the new year, with the market leaning towards sellers but becoming more balanced.²
- And some experts, such as Goldman Sachs, predict a price rise of 4.4% in 2025.
Considering these points, it’s reasonable to estimate that real estate prices will be similar next year. If mortgage rates decline and inventory outpaces demand, the new year could be even more beneficial for potential buyers.
Texas’ 2025 Outlook
Extending TRERC’s projections through the end of 2025, they estimate that after mostly holding steady through the year, rural land prices may begin declining by about 5% statewide as 2026 approaches. Combined with current economic uncertainties, this forecast could put greater pressure on sellers to finalize transactions in the first half of next year, while buyers may be convinced to wait and see how the market develops.
Potential buyers interested in the Texas ranch or farm of their dreams should also consider whether to pursue rural land classified as farm, cropland, or pasture real estate. With farm and pasture values rising rapidly YoY, they likely make for better long-term investments, while 21st-century homesteaders eager to start farming cropland can likely anticipate lower comparable upfront costs.
However, the motives behind purchasing Texas land may factor more into individual decisions. With general values expected to fall across rural land in the state by Q4, purchases likely make more sense for buyers interested in a property they intend to keep—whether for recreation, starting a farm, or other purposes—rather than those interested purely in an investment asset.
Looking more specifically at the Texas home market, prices may begin or continue declining in certain urban areas. Yahoo!Finance considers Dallas, Austin, and San Antonio among the five housing markets it expects to “plummet” within the next 12 months. Conversely, the Dallas Morning News reported recently that a survey of 2,000 industry experts proclaimed the Dallas-Fort Worth real estate market is projected to be the most in demand for 2025. So, the housing price decline may ultimately be relative.
Other Regional Trends to Watch
Compared to Texas and national averages, how are other regional areas expected to perform through 2024 and into the coming year? Certain places throughout the United States will likely grow in 2025, while others may not. Some examples include:
- Growth in the rest of the Sun Belt – Many people have an interest in moving to warmer regions, including those states in the Sun Belt aside from Texas—like Tennessee and the Carolinas.²
- Decline in Florida – On the other hand, some experts predict a slowdown in the housing market in the Southeast, particularly in Florida. These areas tend to have lower income growth and unaffordable housing, not to mention higher insurance costs.⁷
- Growth in the Midwest – People who are looking for an affordable place to live—whether rural or urban—are likely to find reasonably priced options in the Midwest.⁷
With that in mind, it’s crucial to understand that urban, suburban, and rural trends may also fluctuate next year. For example, there is an increase in Millennials moving out of cities and into suburbs, possibly due to a lack of affordability.
And some are even opting for more and more rural areas instead of suburbs close to the city. As they scatter, Gen Z may be gearing up to take their place in urban areas.
How Buyers and Sellers Can Prepare for 2025
If you want to buy or sell your home or property in 2025, especially in Texas, start preparing as soon as possible. At the same time, be prepared to wait and see how the market develops—especially with the state expecting a mild downturn in rural property values as next year continues. Being one step ahead is often beneficial for large transactions like these, so we’ve assembled some tips below for both sides of the transaction.
Tips for Buyers
People looking to buy a home or land in Texas or elsewhere in the US can take several steps to prepare for navigating the 2025 real estate market. As you think about the hunt ahead, consider:
- Calculating your monthly housing budget – What can you realistically afford to pay per month on a mortgage? You’ll have to consider this amount and other costs of living, such as utilities, car payments, groceries and gas, or childcare.
- Increasing credit score and decreasing debt – When you pay down debt, you can increase your credit score and debt-to-income ratio. Lenders look into these factors when determining your mortgage rate, so working on them now can save you down the line.⁴
- Setting aside money for your property – Try setting aside money each week or month toward your future purchase. You’ll need to consider that you’ll have to pay for both your down payment and closing costs. Plus, the more money you can put down on your home, the more likely you’ll receive a lower interest rate.
- Adopting a temporary “wait and see” mindset – Depending on how ready you are to make a purchase, you may want to hold off until you find the perfect Texas property, given the expected year-end market in 2025. Still, you want to be prepared if you happen across a plot you can’t resist.
While these are steps you can take to help you win the real estate market next year, you can always consult a professional for further assistance. Agents, land pros, and financial advisors can help you plan ahead so you feel more confident in navigating the evolving market dynamics.
Tips for Sellers
If you’re looking to sell your home in 2025, you can also begin preparing before listing on the market. Here are some top tips to help you get started:
- Find (and fix) any problem areas – Go over your whole house, other structures, and property and see if anything in disrepair needs fixing. Work on getting those out of the way now so it appeals to more buyers later.
- Enhance your curb appeal – Spruce up the home, buildings, and landscape in any way you can. From cleaning up walkways to fresh landscaping or a new coat of paint, it doesn’t take much to make your property eye-catching.
- Seek out a local agent – Research local agents and land pros before listing your property. These professionals hold considerable knowledge about your area, current market prices, comps, and more. They can help you find the best deal.
- Consider moving up timelines – For Texas sellers, it may make more sense to jump on reasonable offers now and finalize transactions before the expected 5% decline in value hits and takes a good chunk of your sale.
Taking the time to prepare now can make it easier to sell your home, ranch, or other property down the line. All you’ll have to worry about is listing it and finding the right buyer.
Leveraging Land.com for Your Texas Real Estate Decisions
Ready to buy or sell your Texas home or land in late 2024 or 2025? Trust Land.com to help you get the job done right. We make it easy for anyone to stay on top of the real estate market forecast for 2025 and find (or sell) desirable properties.
Sellers can use our website to find local real estate agents in your area who can help you list and sell your property. Buyers, go ahead and browse listings in your desired location to start finding the perfect property—then reach out to a local land pro when you’re ready.
Whether you’re buying or selling a house, farm, or lake home, the team at Land.com is here to help you make informed decisions.
Sources:
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Successful Farming. Farmland Prices Come Back to Earth After Years of Growth. https://www.agriculture.com/farmland-prices-come-back-to-earth-after-years-of-growth-8745041
Bankrate. Housing market predictions: The forecast for the next 5 years. https://www.bankrate.com/real-estate/housing-market-5-year-forecast/
FreddieMac. U.S. Economic, Housing and Mortgage Market Outlook – September 2024 | Spotlight: Natural Disaster Threat. https://www.freddiemac.com/research/forecast/20240923-us-economy-continues-expand
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TRERC. 2024 Texas Real Estate Forecast FALL UPDATE. https://trerc.tamu.edu/article/2024-texas-real-estate-forecast-fall-update/
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Business Insider. Housing Market Predictions: What Homebuyers Should Know. https://www.businessinsider.com/personal-finance/mortgages/housing-market-predictions
Investopedia. Today’s Mortgage Rates by State – Nov. 6, 2024. https://www.investopedia.com/today-s-mortgage-rates-by-state-nov-6-2024-8740357
US Census Bureau. Going With the Flow: State-to-State Migration. https://www.census.gov/library/stories/2023/06/state-to-state-migration.html
U.S. News & World Report. 2024-2029 Housing Market Predictions. https://realestate.usnews.com/real-estate/housing-market-index/articles/housing-market-predictions-for-the-next-5-years
Fast Company. Housing market outlook for 2025: 8 early predictions for home prices. https://www.fastcompany.com/91152396/housing-market-outlook-for-2025-early-home-price-predictions
Goldman Sachs. US house prices are forecast to rise more than 4% next year. https://www.goldmansachs.com/insights/articles/us-house-prices-are-forecast-to-rise-more-than-4-percent-next-year
Dallas Morning News. D-FW is expected to be hottest real estate market in 2025. Here’s why. https://www.dallasnews.com/business/real-estate/2024/10/31/d-fw-is-expected-to-be-hottest-real-estate-market-2025-heres-why/
Joint Center for Housing Studies of Harvard University. AFTER LEADING A BACK TO THE CITY MOVEMENT, MANY MILLENNIALS MOVED TO THE SUBURBS. https://www.jchs.harvard.edu/blog/after-leading-back-city-movement-many-millennials-moved-suburbs
Bankrate. Should I sell my house now or wait? https://www.bankrate.com/real-estate/should-i-sell-my-house-now-or-wait/
