In the Dallas-Fort Worth area, single-family building permits fell from 45,416 in the 12 months ending December 2024 to 39,362 in the latest 12-month period. That is a 13% drop.
It is not a simple retreat. Builders who spent years aiming at the mid-to-upper market are heading back toward entry-level homes, because mortgage rates are high, construction costs are climbing and buyers look different than they used to.
Where the pressure is
Across Texas, builders permitted 140,226 single-family homes over the past year, down from 156,436. Multifamily went the other way: 68,133 units, up from 64,394. In DFW alone, multifamily permits rose to 26,166 from 22,538.
Affordability is the main barrier. The payment burden as a share of median income eased from 26.7% in mid-2024 to 25.3% by mid-2025, but property taxes and insurance keep pushing would-be buyers back. DFW’s median sale price is $222,800, while estimated home values average $374,381.
Inventory explains the urgency. At the end of 2025, North Texas had more than 12,300 finished vacant homes, a 3.27-month supply, above the 2.5 to 3 months that usually balances the market. The region also held roughly 110,450 developed lots with no house on them, a 32.2-month supply. Zillow data showed DFW prices down 3.86% between November 2024 and November 2025.
Builders respond
The incentives got aggressive. LGI Homes sells from $279,900 at Big Sky Estates in Denton County and $295,500 at Kingsborough, with designer upgrades and smart-home technology included. Highland Homes starts at $268,990 at Walden Pond in Forney and offers 4.99% FHA fixed rates or up to $50,000 toward the home. UnionMain Homes has rate buydowns as low as 3.25% on select move-in-ready homes. CastleRock Communities is offering up to $125,000 on inventory homes, and Taylor Morrison up to $50,000 toward financing, HOA dues or closing costs.
The county numbers show builders being choosy. Permits over 12 months: Dallas County 4,486 (from 5,209), Tarrant 8,762 (from 9,283), Collin 11,094 (from 14,298), Denton 6,312 (from 7,345).
The cheapest building is happening in the outer ring around Forney, Royse City and Lavon, and in Kaufman, Ellis and Wise counties, where land costs less. Kaufman County permitted 1,191 single-family homes and Ellis County 2,747, both holding steady while core counties pulled back.
What a $300,000 house costs
About $300,000 is the threshold for many first-time buyers. With 5% down and a rate near 6.5%, the monthly payment including taxes and insurance would run roughly $2,300 to $2,500, or 35% to 38% of a household earning DFW’s median income of about $79,000. Stretched, but workable with tight budgeting.
Builders expect to close around 40,000 homes in 2026, with profits lower than in 2025. If margins shrink too far, some may abandon the entry-level segment, and that would shrink supply.
