The U.S. housing market has found some footing, with national trends pointing to stability in sales of attached homes and growth in detached properties. Texas, however, is marching to a different beat.
The state’s market is splitting across product lines. Detached homes are cooling at a manageable pace. Attached homes — condos and townhouses — are seeing deeper price cuts, with values down 4% year-over-year. Just a few years ago, this same segment was leading the post-pandemic surge, growing at over 13% annually.
Cotality (Home Price Index) HPI Year-Over-Year (2024-2025):
- Nationwide (Detached): +1.36% (Growth)
- Nationwide (Attached): -0.74% (Stagnation)
- Texas (Detached): -1.71% (Cooling)
- Texas (Attached): -4.03% (Correction)
This discount on attached units is creating a big buying window for investors with an eye for repriced assets. The market has flipped. In 2019, Texas investors showed a slight preference for detached homes. By 2025, that pattern reversed.
The widening gap: investor share of attached homes
Data source: Cotality, 2025
In Texas during 2025, 39.5% of all attached home sales went to investors, compared to 31.8% for detached properties. The eight-point spread is a clear departure from historical norms, even accounting for the fact that investors have an affinity for attached properties because of their lower entry points and maintenance efficiencies.
Compared to the national average for investor interest in attached homes — 30.5% — Texas stands nearly ten points higher.
The trend is clear: investor behavior is responding directly to where value has emerged fastest. Attached inventory is now priced to move, and capital is moving with it.
Yield signs ahead
The expanded allocation of investment dollars to attached properties draws a straight line to the rental market. While Texas attached home prices are falling faster than the national average, rents in the Lone Star state are growing faster, according to Cotality’s Rental Trends data:
The 2024-2025 Arbitrage:
- Nationwide: Rents grew +1.58% while prices stayed flat.
- Texas: Rents grew +2.56% while prices crashed -4.03%.
This is a classic "yield play." In Texas, the purchase price is shrinking while rent is expanding. Investors are capitalizing on a unique window to acquire assets at 2022 prices but lease them at 2025 rates. This means stronger yields on new acquisitions and a higher return profile across both short-term cash flow and longer-term upside.
The yield play: buying lower prices with higher rents
Data source: Cotality, 2025
Catching the ‘V’ before the curve
But how long will it last? Cotality’s HPI forecast signals a sales price recovery beginning this year (2026). Rather than a prolonged downturn, the data points to a V-shaped rebound, indicating short-term dislocation, not structural failure.
The model projects a return to positive growth, with attached home prices in Texas stabilizing at a healthy 3.2% annual growth rate through 2030.
The V-shaped recovery forecast
Data source: Cotality, 2025
That timing aligns with current investor interest. The recent correction has created a low entry point, but forward-looking fundamentals suggest recovery is already forming.
By stepping in now, investors are capturing assets at the point of maximum pessimism. If the forecasts hold, they will secure high rental yields today and ride the capital appreciation wave as the market normalizes.
Implication for other U.S. markets
While Texas has unique dynamics (e.g., faster permitting, higher new supply), the underlying logic — cap rate compression followed by yield chasing — is portable.
If attached home prices soften in other overheated markets, and rent growth continues outpacing asset values, expect the same investor reallocation into attached units to emerge elsewhere, especially in markets where:
- New supply is catching up to demand
- Entry-level affordability is strained
- Institutional capital is already present
In this way, Texas may be a lead signal for tactical investor movement in other price-sensitive regions, such as parts of Florida, Arizona, and the Carolinas.
.jpg)
