Denton County’s real estate market remained soft in February. Home sales fell seven percent from the same month a year ago, while median prices slid 3.8 percent. After bottoming in January, available inventory has started to pick up again with typical seasonality. Mortgage interest rates briefly dipped into the fives, but conflict in the Middle East has pushed rates and inflation expectations back up again.

Area home prices remained under pressure from new construction. Builders have been offering generous discounts and lower prices to move their finished inventory. Lower prices on new homes are filtering into the market for resale homes. Existing home sellers continue to see competition from new builds and the motivation from the professional sellers in the market who want to hit those quarterly sales targets.

Inventory is the Key

Available inventory remains higher than last year. With the economy still rather sluggish, it will be interesting to see just how much inventory increases over the next few months. There were plenty of sellers who gave up during the last half of 2025, and we’re seeing some of those listings return to the market as the weather warms up.

Denton County had 4,484 homes for sale during the month of February. That was a year-over-year increase of 8.4%. Denton County has 3.7 months of available supply, an increase of 5.7 percent.

Mortgage Rate & Labor Market Woes

With mortgage interest rates bumping back above six percent, the housing market is still looking for a savior. The employment sector hasn’t been pulling its weight, so many in the real estate industry continue to cry for lower rates. The February employment report saw the private sector shed 86,000 jobs. The U.S. unemployment rate ticked up to 4.4 percent. Private-sector and government employers added only 156,000 jobs over the last twelve months.

As we’ve said before here on this blog, lower rates are a mixed blessing. When they arrive, you might wish they hadn’t. Lower rates are traditionally a sign of economic weakness. A five percent mortgage rate doesn’t help a borrower who has just been laid off.

The current economy is experiencing the worst of both worlds. U.S. consumers are experiencing embedded inflation due to tariffs and high corporate profit margins. At the same time, the labor market remains anemic due to immigration crackdowns and general uncertainty in the business sector.

Return of $100 Oil?

Another ill-advised military campaign in the Middle East recently sent the price of oil spiking over $100. Gasoline prices have seen a huge jump as well. While the Trump administration continues to talk tough, the reality for the U.S. economy is more alarming. With consumers already strained, another extended bout of sharp price inflation would wreck the balance sheets of many Americans who are already living at the margins.

With languishing popularity and plummeting approval numbers, the Trump administration likely understands the stakes. The real question is whether they even care? Do new war crimes make sex crimes disappear from the American media? That seems pretty doubtful.

If you are in the market to buy or sell a home, it’s shaping up to be another sluggish year for the housing market. While good homes continue to sell, buyers continue to scrutinize the affordability equation and the value proposition. It’s still extremely important for sellers to understand what they are selling and price competitively.

If you need help buying or selling, you know where to find me.