How to Buy a Home in Texas in 2025

In 2025, Texas’s housing market presents a unique opportunity for homebuyers. The average price of a home in Texas is around $340,400 with a year-over-year price increase of 6%. The average time a home spends in the market is around 54 days, creating a more balanced market.

This guide breaks down the entire home-buying process tailored specifically for Texas buyers, addressing state-specific programs, challenges, and benefits.

Current Texas Housing Market Overview (2025)

The Texas housing market shows inventory supply is moderate with nearly 5 months of homes available, signaling a balanced market leaning slightly toward sellers.

Houston and San Antonio exhibit quicker sales, averaging around 48 to 50 days on market, whereas Austin homes stay on the market longer, about 65 days. Median sale prices range from $295,000 in San Antonio to $420,000 in Austin, reflecting local market dynamics and demand.

How to Buy a House in Texas: 7 Steps

Before you start searching for homes for sale, you need a clear budget. Because of the State’s cost of living, careful financial planning is required beyond typical home-buying expenses.

Step 1: Figure Out Your Finances

How Much House Can You Afford in Texas?
Texas has an effective property tax rate of approximately 1.69%. Homeowners face rising insurance premiums, averaging $3,851 annually, with additional costs like windstorm and flood insurance, especially for coastal regions. Budget smartly by factoring these in along with mortgage payments.

Get Your Down Payment Ready
Minimum credit scores typically start at 620 for FHA and conventional loans. Consider these first-time buyer programs:

• TDHCA My First Texas Home (up to 5% interest-free down payment assistance)
• TDHCA My Choice Texas Home (assistance for first-time and repeat buyers)
• Texas State Affordable Housing Corporation (TSAHC) Mortgage Credit Certificate program
• VA & USDA Loans with 0% down for veterans and rural buyers

Get Pre-Approved for a Mortgage
Average mortgage rates in Texas (Sept 2025) are 6.45% for a 30-year fixed and 5.63% for a 15-year fixed rate. Pre-approval strengthens your buying position by verifying your financial documents and creditworthiness quickly, often within 24-48 hours

Step 2: Find Your Dream Home in Texas

When looking for homes for sale in Texas, prioritize your must-haves versus nice-to-haves based on lifestyle and budget. Searching homes in cities like Houston or San Antonio may provide more affordable options compared to Austin or Dallas-Fort Worth. Use platforms like Houzeo to filter properties by price, amenities, and location. Explore FSBO listings for potential negotiation advantages.

Step 3: Make an Offer That Wins

Texas homes sell fast, requiring an offer with fair market pricing supported by comparable sales data. Include earnest money of 1-3% of the sale price to show seriousness. Key contingencies protect you from risks—common ones are financing, inspection, and wind mitigation. Consider seller concessions to offset closing costs. Set clear deadlines for seller response to keep timelines tight.

Step 4: The Crucial Due Diligence Period

Inspection windows in Texas usually last 7-10 days. Essential inspections include:

• General home inspection (2-4 hours)
• Pest (termite) inspection
• HVAC inspection
• Roof inspection
• Foundation inspection (critical for slab foundations)

Use this period to assess repairs or negotiate credits with sellers.

Step 5: Secure Your Financing and Insurance

Finalize mortgage underwriting within 7-10 days post appraisal. Texas requires specialized insurance considerations like windstorm insurance in coastal zones (TWIA), and separate flood insurance which is mandatory and not part of homeowners insurance. Expect higher-than-average insurance premiums due to regional weather risks.

Step 6: Prepare for Closing Day

Closing costs in Texas generally range between 2-5% of the purchase price. Key components include:

• Title insurance and escrow fees
• Property taxes (post homestead exemption of $140,000)
• Lender fees and loan documentation costs

Closing typically occurs about 30 days after contract acceptance. Review the Closing Disclosure at least 3 days prior. Final walkthrough is standard before signing final paperwork.

Step 7: Welcome Home!

Texas homeowners benefit from a mandatory homestead exemption reducing taxable value by $140,000, which may increase for seniors/disabled pending voter approval. HOA fees vary but typically range from $200 to $400 monthly depending on the community. Take advantage of these benefits to reduce ongoing costs.

Tips for Texas Homebuyers: Do’s and Don’ts

Do’s:

• Do get mortgage pre-approval before home shopping
• Do work with a licensed Texas real estate agent familiar with local market trends
• Do prioritize home inspections including pest and foundation
• Do research neighborhoods for local amenities and safety
• Do factor in property taxes and insurance when budgeting

Don’ts:

• Don’t skip the due diligence inspection period
• Don’t forget to check for special insurance needs like flood or windstorm
• Don’t overlook comparing mortgage rates among lenders
• Don’t make offers without considering local market competitiveness
• Don’t ignore closing costs—budget for 2-5% of purchase price

Conclusion

Buying a home in Texas in 2025 demands preparation and market savvy. Rising prices and regional variation require a focused strategy supported by strong financing and thorough due diligence. Texas offers valuable programs for first-time buyers and veterans that can ease upfront costs. Stay informed and leverage expert help to make your Texas homeownership dream a reality.

Frequently Asked Questions