The Texas housing market in January 2025 presents a complex landscape characterized by contrasting trends in pricing, sales activity, and inventory levels. The Median Sales Price for homes in Texas has decreased by 4.3% year-over-year, settling at $335,600. This decline in sales price contrasts with the Median List Price, which has increased by 7.1% to $361,500, indicating a potential gap between seller expectations and buyer willingness.

In terms of Price Per Square Foot, the median price has seen a slight increase of 0.4%, reaching $174. Meanwhile, the Median List Price per square foot has risen by 4.1% to $190. This suggests that while sellers are optimistic about pricing, buyers are exercising caution, possibly due to broader economic conditions or market saturation.

Sales activity has experienced a downturn, with the number of Homes Sold decreasing by 1.5% year-over-year to 18,642. Pending Sales have seen a more significant decline of 10.5%, totaling 26,680. This reduction in sales activity could be attributed to the increased inventory, which has risen by 9.6% to 102,791 homes, providing buyers with more options and potentially leading to longer decision-making processes.

The Months of Supply have surged by 50% year-over-year, reaching 5.5 months. This increase indicates a shift towards a more balanced market, moving away from the seller's market conditions that have prevailed in recent years. The Median Days on Market have also increased by 11%, with homes now taking an average of 72 days to sell, further highlighting the cooling pace of transactions.

The average sale to list ratio remains unchanged at 96.9%, suggesting that homes are generally selling close to their listed prices. However, the percentage of Homes Sold above list price has decreased by 1.4% to 10.6%, reflecting a moderation in competitive bidding scenarios. Additionally, the proportion of Price Drops has increased by 5.3% to 31.6%, indicating that sellers are adjusting their expectations in response to market conditions.

Finally, the percentage of homes going off the market within two weeks has decreased by 1.6% to 19.1%, suggesting a slower pace of transactions and possibly more negotiation between buyers and sellers.

Overall, the Texas housing market in January 2025 is characterized by a cooling in sales activity and a divergence between list and sales prices. The increase in inventory and Months of Supply points to a more balanced market, providing opportunities for buyers while challenging sellers to adjust their strategies.