Commentary: More self-inflicted wounds keep the North Texas housing market in recession territory

Continued policy errors from the Trump administration are taking a toll on the housing market.

It’s both sad and disgusting to see Trump mocking affordability as a joke. At the same time, he and his family have been lining their pockets while working Americans struggle to make ends meet. If you ask most billionaires, they will tell you inflation is not really a problem. That’s because they benefit from inflation and the destruction of your standard of living.

Here in the real world, the recession for the Dallas-Fort Worth real estate market is pretty clear to see. On a county-wide level, home sales transactions are back to 2012 levels for Dallas County. Tarrant County is back to 2013 levels. Denton County is sitting at 2017 levels, while Collin County is back to 2020 levels.

The city of Denton has also fared better in terms of transaction volumes thanks to lower average prices. Closed transaction volume is about where it stood in 2018.

With mortgage payments still taking up a huge chuck of buyer’s paychecks, the affordability puzzle has been tough to solve. Areas like Collin County have experienced higher transaction volumes, but that’s only because builders ramped up development in a big way following the pandemic.

Areas where development has been more muted have seen transaction volumes suffer. It’s all about affordability, and home builders have been the go-to source for affordable homes in this recession. When you make it affordable, buyers show up. When affordability is absent, transaction volumes suffer. It’s really that simple.

America’s two largest home builders just told us where that “affordability” mark is. D.R. Horton’s average sale price for the third quarter of 2026 was $365,000. Lennar’s latest report shows an average sales price of $371,000. But here’s the wild part. Lennar was spending $47,000 in incentives to sell that $371,000 home! That tells you how severely affordability is strained.

Builders are throwing out massive incentives and rate buydowns just to get buyers to qualify. If you are trying to sell an existing home in a tough market, this is what you are competing against.

There are plenty of Denton area homeowners trying to sell into this market and finding this out the hard way. I’m tracking one local listing where a family just listed a Denton home they bought back in 2024. They thought they were buying a hedge for rent inflation for their kids at university. What they really got was a bad purchase of a 30-year-old home with functional obsolescence issues and potential capital destruction. It’s now a short sale that’s not actually listed as a short sale, meaning this couple owes more on the mortgage than the house is actually worth.

The sad part of this equation is that the clueless franchise agent who got them into this mess apparently can’t be bothered to market the property in a professional manner. Some of the photos for this listing look like they were taken with a phone in between vape puffs. One of two things will happen with this upside-down property. The sellers will either bring money to the closing table at a substantial loss, or they will give up and decide to rent the house out to stop the bleeding cash flow.

Here’s a free tip for prospective Denton home sellers. You probably aren’t going to get 2023 or 2024 prices when resale inventory has doubled in volume. Hope is not a tactic.

Bond yields flashing warning signs

Bond yields still hold the key for the housing market. Those yields are currently flashing warning signs. That’s an indication that the Treasury secretary and the new Federal Reserve chair have a credibility problem, much like Commodus himself.

Treasury Secretary Scott Bessent has even gone so far as to help Japan intervene in their currency market to deflect attention from fiscal issues here at home. It seems the Trump administration is balancing a lot of plates in the air with no real solutions to solve a complex problem.

If you are in the market to buy or sell a home, this has important implications. While home prices have been relatively stable, transaction volumes continue to suffer from inflationary policies.

The economy is looking pretty fragile in the Golden Age of Grift, and that’s not good news for prospective buyers or sellers. More volatility and uncertainty doesn’t help the real estate market.

Renting vs. buying

At least here in North Texas, the rent versus buy equation continues to favor renting. The DFW area continues to see an abundance of rental stock. That’s welcome news for anyone trying to mitigate their housing expense.

We’ve seen a number of new multifamily developments in Denton County over the past five years. That’s helping to keep a lid on rents and housing expenses. Many of the newer developments in Denton are offering 8-10 weeks of free rent for new tenants. While the dream of homeownership is still challenging, there are options to help you lower your monthly housing expense.

With inflation still percolating in the U.S. economy, the “buy the house and date the rate” crowed has been taken to the woodshed. That was always bad advice, and it remains so. Be careful of any real estate salesman or mortgage loan officer pitching advice on where things will be in two years. They have no clue. You are better off watching the yield on the 10-year Treasury bond. Bond yields will be the ultimate arbiter of truth for the housing market as this recession plays out.

Adding insult to injury

For someone who claims to be a real estate mogul, you would think Trump would be a better steward of the economy and the real estate market. That hasn’t been the case. Wage gains for U.S. workers have fallen below the rate of inflation for four consecutive months. Employment growth under Trump 2.0 has been virtually nonexistent as more workers drop out of the labor force.

Trump’s corporate-friendly, pro-monopoly policies have taken American consumers for a ride. All of the promises Trump tossed out on the campaign trail have been abandoned. After American consumers paid the price for Trump’s ridiculous tariffs, major U.S. corporations have collected over $100 billion in refunds after the tariffs were ruled to be illegal. So much for your stimulus check.

Americans continue to pay at the pump for Trump’s forever war with Iran. Fuel prices are still more than 30% higher than where we started with the year, and the Strait of Hormuz has now become a comical charade. The U.S. strategic petroleum reserve has hit a 40-year low while the national debt has spiraled to $40 trillion.

There are no fiscal conservatives in foxholes.