Is a Housing Crash Happening in Florida and Texas Right Now?

If you’ve been following recent headlines, it might feel like the housing markets in Florida and Texas are crashing. America’s second-largest homebuilder, Lennar, just reported steep price declines on new construction homes—a move that would only happen if they saw a dramatic shift in market dynamics, from seller-friendly conditions to a clear buyer’s market, which is something that all buyers who missed out on the ultra low rates of 2020 and 2021 have been waiting for.

But while the word “crash” grabs attention, what’s really happening is a pricing reset—or in many cases, a reset that has already happened. The real question is: has the bottom already occurred, and is now a prime opportunity to buy? Let’s dig into what’s happening, what Lennar’s price cuts really mean, and how buyers should respond in this evolving landscape.

The Lennar Smoke Signal: Why Builders Are Slashing Prices

In June 2025, Lennar reported that its average sale price fell 8.6% year-over-year, from $449,000 to $410,000. This wasn’t a small adjustment; it was a decisive move reflecting slower unit sales, rising costs, and mounting pressure to maintain earnings by moving inventory quickly. Builders like Lennar operate at a scale where unsold inventory becomes a major liability — not just on paper, but in terms of cash flow and loan repayment obligations. Two key points highlighted by Lennar’s CEO Jon Jaffe during the earnings call stood out:

1. Lennar is being forced to offer more concessions and incentives in Florida and Texas — signaling that buyers in these markets haven’t been motivated to buy at prior price levels, likely due to excess inventory, high home prices, and elevated mortgage rates.
2. The busy season, typically late spring through early fall when most buyers enter the market, hasn’t sparked significant demand yet. Builders and sellers rely on this surge to move inventory. Without it, Lennar and others have had to increase incentives — such as mortgage rate buydowns, price reductions, and closing cost assistance — to encourage buyers to act.

The Financing Pressure Behind the Price Cuts

Lennar and similar builders, like DR Horton, Toll Brothers, and K. Hovnanian have loans of their own — borrowed funds used for land acquisition, development, and construction. These loans must be repaid. The longer they remain outstanding after a home is completed, the faster their profit margin shrinks, and the only way to generate the cash needed is to sell homes. This financial reality drives builders to cut prices and offer incentives when demand softens — they can’t afford to let inventory sit and they really can’t afford to make their shareholders unhappy.

Buyers Finally Have The Negotiating Power in Texas and Florida

Austin, Houston, and major Florida cities like Orlando, Tampa, and Jacksonville are showing clear signs of a pricing reset.

After years of rapid growth, prices in Austin have fallen anywhere from 10-30% (depending on the neighborhood) since early 2022, with sellers offering concessions, price cuts, and assistance with closing costs or repairs. Inventory levels have grown significantly in Austin, giving buyers a wide range of choices and leverage they haven’t seen in years.

Houston’s market has plateaued after a more modest rise during the pandemic. While prices have held steadier, inventory has increased, particularly in the suburbs where new construction has expanded the housing supply. Many Houston sellers are now willing to negotiate on price, closing costs, and move-in dates to secure a deal.

Popular Florida hotspots, Orlando, Tampa, and Jacksonville, have seen home values decline as much as 5-10% in many neighborhoods, according to local data. Newsweek reports that home values have declined in nearly a dozen cities as inventory rises and sellers adjust to a more cautious buyer pool. Factors such as rising insurance premiums, climate-related concerns, and shifting migration patterns have contributed to softening demand. Buyers in these Florida markets are now in a stronger position to request concessions, price reductions, or repairs before closing.

Why New Construction Prices Fall First

It’s no surprise that new construction prices fall before existing home prices:

• Corporate urgency: Companies like Lennar need to maintain cash flow to service loans, pay overhead, and satisfy investors.
• Financial obligations: Builders often take on large-scale financing to fund land and development. The only way to repay these loans is to sell homes.
• Less flexibility than resale: Individual sellers can often wait it out. Unlike large homebuilders, individual sellers typically don’t have loans tied to large-scale developments that need immediate repayment. They might have less financial urgency, allowing them to hold out longer for their desired price. Some are willing to keep their home on the market for months, rent it out, or simply wait for more favorable conditions rather than rushing into a price reduction.

What Buyers Should Be Doing in a Buyer’s Market

Negotiate for Concessions and Terms

First, buyers should negotiate directly with home sellers for price reductions, closing cost credits, repairs, and flexible terms. The current market offers a unique chance to secure these concessions. Learn more in our guide on seller concessions vs. price reductions.

Then, to negotiate the best deal on financing, buyers should work with a mortgage broker like LendFriend. Unlike going directly to a single bank or lender, a mortgage broker shops around on your behalf to find the best loan terms and rates, helping you compare options across multiple lenders. This ensures you can secure valuable benefits such as temporary rate buydowns, closing cost credits, and access to some of the most competitive mortgage rates available today. Learn more in our guide on the differences between mortgage brokers and lenders.

Focus on Long-Term Value

Lock in the right home at the right price today, knowing you can refinance when rates improve. Historically, home prices in the U.S. tend to rise steadily over time, even though short-term dips occur. The recent declines in Texas and Florida represent an opportunity—buyers today are stepping in at prices that may look like bargains in a few years. People who bought during downturns like 2008 or even early 2020 often worried that prices might fall further, but looking back, those who bought when "there was blood in the streets"—as Warren Buffett famously put it—often made the best long-term investments. Our article on buying now and refinancing later explains how to plan ahead.

Shop New Construction or Resale

While builders like Lennar are offering steep discounts, resale homes often provide even greater opportunities. Resale sellers may be more flexible and motivated to negotiate on price, closing costs, or repairs. In many cases, resale homes are located in more desirable neighborhoods with established amenities, mature landscaping, and stronger community appeal. Buyers should strongly prioritize resale options because they typically offer better long-term value, more room for negotiation, and less location-based risk than new builds This can provide buyers with greater confidence in their investment compared to the uncertainties that sometimes come with new developments.

Could Prices Rebound Soon?

If rates fall, many buyers may accelerate their homebuying timeline, rushing to secure homes before prices rise again — potentially leading to bidding wars and upward price pressure. That’s why buyers who act now may be able to beat the rush.

In addition, historical patterns show that when interest rates drop after a market slowdown, demand rebounds quickly. This can create a sharp swing from a buyer's market to a seller's market almost overnight. Buyers sitting on the sidelines today could find themselves competing fiercely for the same properties tomorrow.

Experts also note that even modest rate cuts can have an outsized impact on affordability, pulling thousands of would-be buyers back into the market at once. Combined with the limited supply of desirable homes in many Texas and Florida markets, this could put upward pressure on prices far faster than many expect.

Common Buyer Mistakes in a Shifting Market

Even in a market that favors buyers, it’s easy to make missteps that can cost you financially or cause you to miss out on the right home. Here are several common mistakes to avoid:

Waiting too long for the absolute bottom. Many buyers hesitate, hoping prices will drop further or rates will suddenly fall. While no one wants to buy at a peak, the reality is that timing the bottom is nearly impossible, and waiting too long can mean missing out on favorable conditions or watching prices rebound before you act.

Lowballing too aggressively. While sellers are more flexible today, offers that are unrealistically low can alienate sellers and result in lost opportunities. Smart buyers negotiate firmly but fairly, aiming for concessions without pushing so hard that they lose the deal.

Not shopping for the best mortgage deal. Some buyers only talk to their primary bank or one lender. In today’s market, working with a mortgage broker like LendFriend can help you compare multiple options and secure better rates, lower fees, and terms that align with your financial goals.

Overlooking resale advantages. New construction discounts can be tempting, but resale homes often offer better locations, established neighborhoods, and long-term value. Don’t overlook these benefits in your search.

Skipping inspections and contingencies. Eager to close a deal, some buyers waive protections that could save them thousands. Always conduct a thorough inspection and think carefully before dropping important contingencies.

Failing to plan for the long term. Focus not just on today’s price, but on where you see yourself in five or ten years. Buying a home is a long-term investment, and aligning your purchase with your future plans is key to lasting satisfaction and financial success.

Final Thoughts: No Crash, But a Window of Opportunity

This market reset offers rare opportunities for smart, prepared buyers. With prices adjusting, seller flexibility increasing, and financing tools like temporary rate buydowns available, buyers who act now can secure meaningful advantages before competition heats up again.

LendFriend Mortgage is your trusted partner in this environment. As your mortgage broker, we’ll help you negotiate the best possible deal, secure valuable concessions, and access the most competitive financing solutions across multiple lenders. Let’s make sure you don’t just buy a home — let’s make sure you buy smart.

At LendFriend Mortgage, we’re here to help you make the smartest move. Contact us or call 512.881.5099 today.