Housing Market Update

Stability in the Inflation Rate

One of the top concerns for homebuyers is inflation. Rising living costs make affordability a key consideration, as buyers weigh the long-term commitment of a mortgage.

At the start of 2025, the inflation rate stood at roughly 3.0 %, and it remains essentially unchanged today. This stability suggests that inflation is neither spiking nor declining significantly. However, since it remains above the long-term target of around 2 % cited by the Federal Reserve, sectors like real estate continue to experience elevated inflationary pressures.

Interest Rates

Interest rates are another critical factor affecting home affordability. After a long period of increases, the Federal Reserve has begun cutting its policy (federal funds) rate. In 2025, short-term Treasury yields and other money-market rates have started to decline, and mortgage rates are beginning to ease as well.

For example, 30-year mortgage rates are now in the low 6 % range, lower than earlier this year. From 2022 through much of 2023, the Fed raised rates aggressively to combat high inflation. The current shift toward rate cuts indicates that the Fed sees rising risks of economic weakness, particularly in employment, even as inflation remains 1% above the 2% target.

Inventory Equates to Options

Falling interest rates combined with steady inflation create favorable conditions for buyers. Builders across Dallas-Fort Worth have continued purchasing land and constructing new homes, resulting in a healthy supply. This abundance of inventory gives consumers plenty of options, making it easier to find a home that fits their budget, preferred location, square footage, and design preferences.

Optimistic Outlook for Consumers

Although 2025 has presented challenges for the housing market, improving conditions in interest rates, inflation, and inventory levels are creating opportunities for consumers. Now is an ideal time to turn the dream of homeownership into reality.

Frequently Asked Questions (FAQ)

How long does inflation affect home prices?

Inflation increases the overall cost of goods and services, including construction materials and labor. When inflation is higher than the Fed’s target, home prices tend to rise, making new homes more expensive.

Are mortgage rates expected to go lower?

While rates have started to ease in 2025, predicting exact movements is difficult. Current trends suggest more favorable borrowing conditions compared to the highs of 2022–2023.

Why is housing inventory important for buyers?

More inventory means more choices. Buyers can find homes that match their budget, location preferences, and design requirements without rushing into a decision.

Is now a good time to buy a home?

With stable inflation, falling interest rates, and plenty of inventory, the market is showing conditions favorable for buyers. It’s a strong opportunity for those ready to take the next step in homeownership.