Denton County home inventory has quietly surged to a record high. Across North Texas, the supply of available homes has never been higher. The much-maligned housing shortage is a thing of the past. All it took was a little time and normal mortgage interest rates.
There are now over 5,000 homes available in Denton County. That supply is well above the previous high in June of 2019. Denton County now has 4.4 months of supply. That’s a 66 percent rise from last year. It’s also well above inventory levels we saw prior to the pandemic.
Return of the Resales
The big change from the past few years is the rise of resale inventory in Denton County. The supply of existing homes skyrocketed 69 percent from last year. It has ballooned 74 percent in terms of months of supply. In a normal market (something we didn’t see for a while), existing home supply constitutes the bulk of supply and sales. This is why total available home supply is now at a record high across North Texas.
Builders have been pretty good at working off new construction supply so far in 2025, but resale inventory started piling up. Many existing home sellers were holding out for better prices in an inflating market. Those who weren’t able to sell last year are taking another bite at the apple. Consumer demand has been rocked by tariff volatility and economic weakness this year. That has put a dent in big-ticket purchases like homes.
Mortgage interest rates are bouncing around between 6 and 7 percent. Prospective buyers are still getting whipsawed by mortgage rate uncertainty and inflated home prices. Closed home sales fell 7.5 percent from last year across Denton County. Pending contracts were 10 percent lower.
Market Cycle Bites Back
That’s the funny thing about markets and market cycles. You can only manipulate and distort asset prices for so long. The stimulus and interest rate suppression during the pandemic left the local market with a massive dose of home price inflation and a distorted housing market.
Investors and speculators poured in, along with other existing asset owners, Realtors and everybody looking to cash in on the real estate bonanza. Now the shine has faded, and many are realizing homes are more than just a source of passive income. In real estate lingo, the easy money has been made. Many Airbnb speculators are getting a crash course in market cycle dynamics.
Home inventory in Denton County has returned.
U.S. builders are watching unsold new homes pile up.
Bond Markets Smell a Rat
With Trump’s capitulation on tariffs, the market is sniffing out more inflation and higher bond yields. The insider trading and pump-n-dump action over the last few months has made some well-connected market participants very rich. It has done serious damage to the general U.S. economy. U.S. credibility is now in the hands of one of the most corrupt administrations in U.S. history.
Remember the department of government efficiency™. That was a good joke. It’s fascinating to see Republicans in Congress push a budget which racks up $trillions in new debt while starving children and the elderly.
The implications of more deficit spending and continued tax cuts for the wealthy will not go unnoticed by the bond market. In Layman’s terms, don’t expect a significant drop in mortgage rates until we see the recession.
It appears Treasury Secretary Bessent is already taking a back seat to Trumponomics and the art of the con. For all of the talk about targeting 10-year Treasury yields, they have little to show for it. Yields are right back where they were in February before the tariff nonsense started. Core inflation is still running at 2.8 percent, but the current administration is already trying to prime the pump. It’s foolish to expect the Federal Reserve to cut rates with this setup.
Dude, Where’s My Pent-Up Demand?
It should come as no suprise that the return of housing supply just happens to coincide with the return of student loan debt payments. Those deferrals on $1.8 trillion in student loan debt were undoubtedly helping to prop up demand for housing. That party is now over. The resumption of loan payments is hitting FICO scores and pocketbooks this year. The latest report on U.S. household debt and credit provides an idea of what that looks like. Let’s just say it’s not very pretty.
In another bit of irony, the new FHFA director, Bill Pulte, made a forceful announcement that they would be going after mortgage fraud. To that I would say, let the crackdown begin!
“If you commit mortgage fraud, we are going to go after you.” Bill Pulte – FHFA
While I fully support Bill’s message here, I can’t help but remember what the FHFA has done with conforming loan limits. Any rational person can see the FHFA encouraged reckless/risky loans and facilitated rampant home price inflation. I’m sure PulteGroup and other major builders were happy to have the new business. Ditto for mortgage companies and U.S. banks.
I posed the question to Director Pulte of whether he would support lowering those conforming loan limits by at least $100,000? I’ll let you know when I get an answer.
No Time to Get Greedy
This is no time to get greedy if you are in the market to sell a Denton County home. Greed and the reluctance of many sellers to lower prices is precisely the reason inventory is now piling up. Home prices in Denton County continue to be sticky. Median prices of existing homes sold last month were up 1.5 percent. Median prices of new homes sold were down nearly 4 percent, and that’s not including all of the incentives builders are throwing in to get deals done.
Despite what the local appraisal district is telling you, your home is probably worth slightly less than it was last year. All markets are local of course, but the supply & demand dynamic is still relevant. When buyers have dramatically more choices in the market, they will go where the deals are.
If you are trying to sell a home in Denton County Texas, it’s more important than ever to understand what you are selling and who you are competing against.
If you need professional representation to sell your Denton County home, give me a call. I would be happy to meet with you for a free, no-hassle consultation.
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