Texas continues to be a focal point for luxury new construction, with its diverse cities offering unique opportunities for high-end buyers and businesses. Despite broader market fluctuations, the state's luxury sector remains resilient, driven by strong demand and strategic developments.

In 2025, many experts expect strong growth, especially in the state’s large metropolitan areas – the Dallas-Fort Worth area in particular followed by Austin, but don’t count Houston and San Antonio out.

Market Overview: Stability Amidst Economic Shifts

In 2023 and 2024, Texas experienced a surge in housing demand, particularly in the luxury segment, according to Urban Realty, the DFW area led the way with 38.7% of all $1M + home purchases.

However, by early 2025, the market began to stabilize. Factors such as higher mortgage rates, 4- 5 months of inventory, and economic uncertainties have tempered the rapid growth, but the luxury market has shown remarkable resilience. For instance, San Antonio saw a 7% increase in home sales in 2024 compared to 2023, indicating a stabilizing market.

Luxury Pricing Trends Across Major Metros

The luxury new construction market in Texas varies across its major cities:

• Austin: Known for its tech-driven economy, Austin's luxury homes are in high demand. Prices for brand new homes in cities a short drive from Austin are priced from the high $400s, while new homes in upscale areas like West Lake Hills and Tarrytown range from $1.5 million to over $5 million.
• Dallas-Fort Worth (DFW): DFW's luxury market is thriving, with luxury residences in areas like Highland Park and Southlake priced between $1.2 million and $4 million. High-end new construction homes in developments just outside of Dallas and Fort Worth start from the high $600s to the low $700s. The region's strong economy and job growth continue to attract high-end buyers.
• Houston: Houston's luxury market remains robust, with new homes in neighborhoods like River Oaks and The Heights ranging from $1 million to over $3 million. Spacious estates outside Houston in nearby cities are priced in the high $400s to the high $900s. The city's diverse economy supports sustained demand in the luxury segment.
• San Antonio: While more affordable than other major Texas cities, San Antonio's luxury market is growing and spreading to small cities in the metropolitan area. Larger spacious new homes in Maxwell, Castroville and New Braunfels start in the high $400s. New homes in areas like The Dominion and Alamo Heights are priced between $800,000 and $2 million.

Homebuilders: Navigating the Luxury Landscape

Texas homebuilders are adapting to the evolving market by focusing on luxury developments or adopting creative selling strategies. While some builders have adjusted their forecasts due to broader market conditions , the luxury segment continues to see investment.

Builders will continue building in gated communities, building golf-courses, and incorporating high-end amenities, sustainable features, and smart home technologies to meet the expectations of affluent buyers. Expect them to innovate, remain creative, and look for ways to attract more buyers than the competition. A market collapse isn’t on the board, but many builders are weary of downturns, so don’t be surprised if the players seem for competitive than they should be. After years of 1 and 2 months of supply, 4 to 5 months of inventory will certainly put promotions and incentives in play (even though that’s exactly what a healthy market looks like).

Top Luxury Communities in Texas

Several master-planned communities across Texas are setting the standard for luxury living:

• Bridgeland (Houston): Spanning 11,500 acres, Bridgeland offers upscale homes, extensive parks, and top-tier amenities, attracting buyers seeking a blend of nature and luxury.
• Magnolia Woods (Magnolia near Houston): This new neighborhood has ample space for outdoor amenities, including a community pond, walking trails and a children’s playground. These spacious residences on large homesites are located in the Magnolia ISD, a highly rated school district. Homes are expected start from the mid $500s.
• Santa Rita Ranch (Austin): This award-winning community features luxury homes, with resort-style amenities, and is recognized as one of the top-selling master-planned communities in the Austin area.
• Esperanza (Dripping Springs near Austin): Just outside of Austin, Esperanza is near big-city conveniences and located near exceptional schools. These homes are priced from the mid $800s and sit on large homesites. Every one-story home is spacious with premium upgrades.
• Frisco Station (DFW): Part of Frisco's "$5 billion Mile," this mixed-use development includes luxury residences, office spaces, and entertainment options, catering to a high-end lifestyle.
• Riverstone (Houston): Located in Fort Bend County, Riverstone offers luxury homes within a 3,700-acre master-planned community, featuring lakes, parks, and upscale amenities.

2025 Forecast: Optimism in the Luxury Segment

Looking ahead, the Texas luxury new construction market is poised for continued growth:

• Demand: High-net-worth individuals and out-of-state buyers are expected to keep fueling demand, especially in cities with strong economies and quality of life.
• Relocation: Corporations relocate to Texas often; this happened frequently in the early 2020s; corporate executives buy higher end homes.
• Inventory: While inventory levels have increased, the luxury segment remains relatively tight, supporting price stability.
• Interest Rates: Although higher mortgage rates have impacted the broader market, luxury buyers, often less sensitive to financing costs, continue to invest.

Overall, the Texas housing market in 2025 is characterized by stability, strategic growth, and sustained demand, making it an attractive option for discerning buyers. There’s a lot of opportunity for luxury home builders and investors in large metropolitan areas and high-end master-planned communities throughout Texas. The same goes for entry-level homes and move-up homes, even though these buyers may have a harder time buying when rates and inflation are high.

Texas real estate will have a bright future as long as residents, small businesses, and corporations from Colorado, California, New York, and Illinois continue looking to the state for more freedoms, a business-friendly environment, and lower costs of living. The state has a bright future in 2025 and beyond.