By every measure that actually describes a housing system, this is the strongest market on record. And appreciation isn’t one of those measures.
Last updated: August 2026
Nobody in Ellis County feels like they’re living through the strongest housing market in American history. Prices in DFW have softened for eleven straight months. Appreciation forecasts through 2030 look anemic next to 2021. Foreclosure filings are up 21% year over year. Every headline reads like a warning.
Now look at the same market through a different lens. American homeowners hold $34.9 trillion in equity against $13.8 trillion in mortgage debt, the highest equity share the Federal Reserve has ever recorded. Less than 2% of mortgaged homes are underwater. Texas closed 99,688 transactions in the second quarter, a 4.5% increase in volume year over year. Ellis County added 8,413 residents in a single year, 85% of them arriving from another state, and authorized 2,834 new residential units to house them.
Both paragraphs are true. They only feel contradictory because most people grade housing on either price appreciation or speed of sales, neither of which measures health.
Start Here, Because Everything Else Depends on It
North Texas Market Insider — Market Structure
Home price appreciation is not a measure of housing market health
The metric everyone watches pointed the wrong direction for two full years before the last collapse.
2004 – 2006
Fastest appreciation on recordRising chart. Rotting foundation.
2026
Slowest appreciation since 1975 rangeFlat chart. Record foundation.
Appreciation measures how fast credit and speculation are entering the system. Sometimes that overlaps with health. Frequently it signals the opposite.
Sources: Federal Reserve Financial Accounts of the United States (Z.1), Q1 2026 release and historical series; CoreLogic/Cotality negative equity data; Fannie Mae/Pulsenomics Home Price Expectations Survey Q2 2026; CFPB Ability-to-Repay/Qualified Mortgage rule, effective January 10, 2014. Subprime and Alt-A origination share for 2005–2007 is a widely cited post-crisis estimate, not a single-source figure. “Record highs” and directional arrows describe trend direction, not a single indexed value.
Test the metric against the record.
The years of fastest appreciation in modern American history ran from roughly 2004 through 2006. Prices climbed at rates that made homeowners feel wealthy and made waiting feel expensive. Over that exact stretch, the Federal Reserve’s Z.1 data shows owners’ equity as a share of household real estate value falling to 58.9% by Q4 2006. Prices were setting records while the ownership position underneath them deteriorated, because the price growth was being manufactured by leverage: subprime and Alt-A products made up an estimated 20% or more of originations by dollar volume, and every dollar of that debt showed up on the wrong side of the ledger.
Rising chart. Rotting foundation. The metric everyone was watching pointed the exact wrong direction for two full years before the collapse.
Compare that to now, where the appreciation number is weak and the equity share sits at 71.6%, the highest on record. In both cases the appreciation rate moved opposite to the structural condition of the market.
Appreciation is a measure of how fast credit and speculation are entering the system. Sometimes that overlaps with health, but more often than not it is the leading indicator of the opposite. What we have in 2026 is a market with the deepest balance sheet, the most disciplined credit standards, and the most durable demand base on record, and the slow price growth is a direct product of the same discipline that produced the strength. Credit that cannot be extended recklessly cannot manufacture rapid appreciation. The boring chart is the receipt.
Strength One: The Household Balance Sheet Has Never Looked Like This
The Federal Reserve’s Financial Accounts of the United States (Z.1), released June 11, 2026 for Q1 2026, put the market value of household owner-occupied real estate at $48.7 trillion, against home mortgage debt outstanding of $13.8 trillion and owners’ equity of $34.9 trillion.
Owners’ equity represented roughly 71.6% of total household real estate value, per the Fed’s HOEREPHRE series.
Stress test — if prices fell from here
Both scenarios stay above the 58.9% cushion homeowners held entering the last crisis.
Method: equity share figures from Federal Reserve Z.1 series HOEREPHRE. Decline scenarios are Bobby Franklin’s arithmetic applied to published Fed figures ($48.7T value, $13.8T debt), not a Fed forecast, holding debt constant. Ratio measure, unaffected by inflation. Nothing here predicts a decline.
The American homeowner carries roughly 13 percentage points more cushion than at the top of the greatest housing bubble in modern history, and 26 points more than at the bottom of the crash that followed.
Negative equity tells the same story but with more force. At the Q4 2011 peak, CoreLogic reported 22.8% of all mortgaged properties, 11.1 million homes, were underwater, rising to 23.7% by Q1 2012. Today that figure sits near 1.8% nationally per CoreLogic/Cotality, and 1.7% in Texas. Close to a 13x reduction.
The equity is also liquid. ICE Mortgage Technology’s June 2026 Mortgage Monitor found homeowners tapped equity at the highest first quarter levels since 2021, with second lien lending at an 18 year high as borrowers protect their existing first mortgage rate rather than cash out refinancing. Total tappable equity runs near $11.2 to $11.7 trillion, averaging roughly $204,000 per mortgage holder. A homeowner who loses income in 2026 has a HELOC, a modification, and a profitable sale in front of them long before default enters the conversation.
The best argument against my own thesis
Here is the objection a sharp seller will raise, and it deserves a real answer rather than a dodge.
That $34.9 trillion in equity was largely created by the appreciation I just told you doesn’t measure health. It is a nominal figure, not inflation adjusted. If prices fall, the equity evaporates, so calling it structural strength is circular.
The first half of that is correct. The conclusion is not, for two reasons.
The metric I’m using is a ratio, not a dollar amount, which makes it inflation-neutral by construction. Nominal price growth inflates the numerator and denominator together. The 71.6% figure is not an artifact of dollars being worth less.
More to the point, run the sensitivity. Applying a 10% national price decline to the Fed’s Q1 2026 figures leaves roughly $43.8 trillion in value against unchanged $13.8 trillion in debt, an equity share near 68.5%. A 20% decline, which would exceed the entire peak-to-trough national drop of the last crisis, still leaves the share above 64%. Both outcomes sit comfortably above where homeowners started in 2006, before a single foreclosure was filed. That arithmetic is mine, applied to published Fed figures, and I’d encourage you to run it yourself.
The equity cushion is deep enough to absorb a decline larger than the one it would need to survive which is the very definition of structural health.
Strength Two: The Loans Themselves Are Better, by Law
The 2000s market ran on products engineered to fail on a schedule. Negative amortization. Interest only payments. Stated income. Two year teaser rates built to reset upward and force a refinance the borrower could not qualify for.
Those products are not just out of fashion, they are legally prohibited. The CFPB’s Ability-to-Repay and Qualified Mortgage rule, effective January 10, 2014, requires lenders to make a reasonable, good faith determination based on verified and documented information that the borrower can actually repay, weighing eight specific underwriting factors. It generally bars negative amortization, interest only payments, balloon payments, terms beyond 30 years, and no-doc lending from qualifying as Qualified Mortgages. It caps back-end DTI at 43% under the general standard and limits points and fees to 3% of the loan amount.
Credit profiles now reflect this. The New York Fed’s Household Debt and Credit Report for Q1 2026 shows 58.9% of origination dollar volume going to borrowers with scores of 760 or higher.
The loans Americans are actually carrying right now are locked at fixed rates to a degree that has never been seen before. Realtor.com’s Q1 2026 analysis found 49.9% of outstanding U.S. mortgages carry rates of 4% or lower, with roughly 4 of every 5 mortgages below 6%. The American Bankers Association’s DataBank shows ARM share of outstanding loans falling from 5.3% in Q1 2020 to about 4% by mid-2025. Half of American homeowners hold a payment that cannot rise and could not be replicated today at any price.
Where the strength thins. The MBA’s National Delinquency Survey for Q1 2026 showed overall delinquency at 4.44%, up 40 basis points year over year, but the headline hides a split. Conventional delinquency actually fell 14 basis points to 2.75%. FHA jumped to 11.88%, up 36 basis points in one quarter, with VA at 4.99%. The Urban Institute’s Housing Finance Chartbook shows median loan to value climbing from 91% in December 2021 to 95% by November 2025 and median DTI moving from 39% to 42%, with elevated default risk among down payment assistance borrowers specifically.
The strength is real and unevenly distributed. If you are buying with FHA financing plus layered assistance in 2026, that data describes your segment, and reserves matter far more than the maximum number you were approved for. Any agent telling you the whole market is uniformly healthy has not read the survey.
Strength Three: Texas Transactions Are Moving Again
A market can hold flat prices two ways. It can seize up, with buyers and sellers refusing to meet and volume collapsing. Or it can clear, with both sides transacting at realistic numbers.
Texas is doing the second one. The Texas Quarterly Housing Report showed the statewide median flat at $340,000 in Q2 2026 on 99,688 closed transactions, a 4.5% year over year increase in sales volume. Volume rising while price holds is the signature of a healthy functioning market. The Texas Real Estate Research Center projects a 1.3% statewide median increase for full year 2026 alongside a 1% rise in single family permits to 155,000 units.
To be precise about what that figure does and does not prove: it is a statewide number. Statewide volume growth does not establish DFW or Ellis County volume growth, and I am not going to let a Texas-level statistic stand in for a local one. Metro-level closed transaction counts come out of NTREIS, and I track them monthly on the live DFW market data page rather than inferring the local picture from the state total.
Foreclosure numbers describe efficiency rather than distress. ATTOM’s Mid-Year 2026 report counted 227,548 properties with filings in the first half of the year, up 21% year over year, which sounds ominous until you see the rate: 0.16% of all housing units, or one in every 632 homes. At the 2007 to 2010 peak, filings hit roughly 2.5% to 2.9% of households annually. Average foreclosure timelines compressed to 563 days in Q2 2026, the fastest since 2013. The pandemic era moratorium that could have suppressed these numbers ended July 31, 2021, so the 2026 figures reflect normal servicing rather than a policy pause finally catching up.
One caution on local inventory data, including figures I’ve cited myself. Reported June 2026 DFW-Arlington MSA numbers show months of inventory near 4.5, down from 4.8 a year earlier, with total days on market around 88. A separate broker report for the same period shows 1.8 to 2.4 months and 21 to 28 days at a median near $365,000. Those readings are not compatible. They reflect different submarket compositions and measurement methods, which is why a metro-wide average is close to useless for pricing a specific house on a specific street.
Strength Four: Ellis County’s Demand Base Is a Migration Pattern, Not a Forecast
National housing strength is an abstraction. Local strength is people showing up with jobs and moving trucks.
Ellis County’s population reached 240,867 in the 2025 Census vintage, up 8,413 residents or 3.62% in a single year. TxDOT’s analysis ranks the county 40th nationally for numeric growth and attributes 85% of that growth to domestic migration rather than natural increase. Since the 2020 Census the county has grown 28.28%, eighth among all 254 Texas counties.
Domestic migration is the strongest demand signal in housing, because it is a revealed preference backed by a relocation cost. Nobody moves a family from another state on a whim about interest rates.
Ellis County authorized 2,834 residential units over the trailing 12 months ending June 2026, 248 in June alone, up 3.3% year over year and with 98.4% of them for single family homes. Midlothian alone runs more than fifteen active new construction communities, with Waxahachie closer to 50.
Underneath that sits capital that does not reverse on a quarterly earnings call. The Ellis County data center pipeline and the broader North Texas data center buildout represent multi-year commitments, including a Google project in Midlothian targeting early 2027. Construction payrolls first, permanent operations payrolls after, in a corridor already offering new construction well below Dallas County pricing with metroplex commute access. More details are available in our Midlothian city guide.
Texas Wrote Its Advantage Into the Constitution
Texas is the only state that places home equity lending rules directly in its constitution, under Article XVI, Section 50(a)(6). Every home equity loan, HELOC, and cash out refinance secured by a Texas homestead is capped at 80% combined loan to value. All liens together cannot exceed 80% of fair market value at origination. The rules also require a 12 day cooling off period, cap lender fees at 2% of the loan amount, allow only one such loan per homestead per 12 months, and prohibit prepayment penalties.
Because those protections are constitutional rather than statutory, no legislative majority can dilute them. Changing them requires a voter-approved amendment.
During the 2000s credit boom, homeowners in states without equivalent limits stacked equity debt past 100% combined LTV, so a modest price decline instantly manufactured a negative equity population. Texas households structurally could not do that. They carried a mandatory 20% buffer into the downturn, which is a meaningful part of why Texas negative equity sits at 1.7% today while Nevada, Arizona, California, and Florida posted catastrophic underwater rates last cycle. Your equity in Waxahachie is protected by a rule no lobbyist can quietly repeal.
Which Is Also Why the Crash Everyone Predicts Has No Delivery Mechanism
Stack those strengths and the crash question answers itself, almost as an afterthought.
North Texas Market Insider — Crash Risk Analysis
A foreclosure cascade needs four conditions. None of them currently exist.
Falling prices only become a cascade when they force sellers to the exit. Here is what that requires, and where each requirement stands in 2026.
A large underwater population
Owners who cannot solve the problem by simply listing the house.
Payment shock at scale
Adjustable rates resetting upward on a schedule, as in 2006.
Distressed sellers hitting the market at once
Simultaneous forced supply is what turns softening into collapse.
Origination standards that rebuild the risk pool
Negative amortization, stated income, and no-doc lending are prohibited from qualifying as Qualified Mortgages.
The distressed inventory buyers keep waiting for has no supply chain.
Sources: CoreLogic/Cotality negative equity data, 2026 and Q4 2011; Realtor.com Q1 2026 outstanding mortgage analysis; ATTOM Mid-Year 2026 U.S. Foreclosure Market Report, released July 16, 2026, reflecting 227,548 filings across the first half of 2026, or one in every 632 housing units; CFPB Ability-to-Repay and Qualified Mortgage rule, effective January 10, 2014. The 2007–2010 peak filing range is an annual household rate and is not directly comparable to a six-month figure without adjustment. This does not rule out further price declines. DFW has posted eleven consecutive months of year-over-year price softening. The argument here concerns cascade mechanics, not price direction.
A foreclosure cascade requires a large population that is simultaneously underwater, payment shocked, and unable to sell. Record equity removes the first condition. A fixed rate book where half of all owners hold sub-4% loans removes the second. Rising volume and 0.16% filing rates remove the third. Ability-to-Repay underwriting prevents the population from re-forming at origination.
The distressed inventory buyers keep waiting for has no supply chain. Not because prices can’t fall, since they have already fallen in DFW for eleven months, but because falling prices only become a cascade when they force sellers to the exit, and today’s owners have equity, low fixed payments, and every reason to hold.
Every Strength Sends a Bill, and This One Came Due in Your Appreciation
The same credit discipline that built the record equity position is the reason your house will not double again. You cannot have both. Anyone selling you the strength story without this section is selling you half a market.
The chart circulating through industry presentations, showing 1.72%, 1.98%, 2.78%, 3.10%, and 3.34% for 2026 through 2030, traces to the Fannie Mae/Pulsenomics Home Price Expectations Survey. The Q2 2026 edition put panelist averages at 1.7% for 2026, 2.0% for 2027, and 2.8% for 2028. The Q1 2026 Pulsenomics report showed a cumulative five year forecast through 2030 of 14.6%, with 47% of the 116 panelist group flagging downside risk against 34% previously. Fannie Mae’s internal ESR forecast runs stronger at 2.5% to 3.2% for 2026, MBA for June came in at +0.6%, and Cotality projected 5.3% appreciation by April 2027. Anyone presenting one number as settled is showing you a slide rather than an analysis.
Do not accept the claim that this range is a return to normal. Home Economics, an independent shop on the Pulsenomics panel, places its own 1.6% 2026 forecast in the 15th percentile of historical outcomes since 1975, with its five year cumulative projection at less than half the historical norm of roughly 20%. Long run nominal appreciation tends to run between 3.5% to 4.5%. So what we are entering is genuinely and historically slow, not typical.
The local wrinkle other agents in this corridor will not say out loud. National appreciation forecasts assume constrained supply. Ellis County is not supply constrained. With 2,834 permits over twelve months, forty-plus active Waxahachie communities, and the statewide gap between new construction and resale pricing compressed from roughly $100,000 pre-pandemic to just above $15,000, here is the conclusion the data actually supports: for a large share of Ellis County buyers right now, a new build with a builder rate buydown is the better purchase than a comparable resale. Better payment, no deferred maintenance, full warranty, roughly the same price.
I list resale homes and often sell new construction to buyers. Resale sellers in this corridor are competing against a finance product, not just against other resale listings, and should underwrite their own appreciation below the national forecast.
What a Strong, Slow Market Actually Changes About Your Decision
If the market were weak, the advice would be to wait for capitulation. If it were fast, the advice would be to buy anything you can and let appreciation cover your mistakes(just kidding). My advice is neither, and that changes four specific calculations.
North Texas Market Insider — Strategy
Four decisions that change in a strong, slow market
A structurally sound market with 1.7% appreciation calls for different moves than a 15% market did. Here is what actually flips.
1. How long you plan to hold
In a 15% market
Transaction costs of 7% to 9% were recovered on appreciation in under a year. Holding period barely mattered.
At 1.7%
Recovering those costs on appreciation alone takes roughly five years. Under five years, you are buying a payment and a place to live. Evaluate it on those terms.
2. Whether to renovate
In a 15% market
Over-improving got bailed out by the tide. Renovation functioned as arbitrage.
At 1.7%
Renovation is consumption, not arbitrage. Improve for the years you will live there, since the market has stopped funding the resale premium.
3. Whether to wait for rate relief
In a structurally weak market
Waiting is rational, because distressed inventory eventually arrives and prices capitulate.
In this market
There are no forced sellers to produce that inventory. Waiting costs you the negotiating room, seller-paid buydowns, and builder incentives that disappear the moment rates drop and sidelined demand returns at once.
4. How you move up
Historically
Sell and upgrade. Rates were roughly comparable, so the existing loan was not worth protecting.
In this market
With about $204,000 in average tappable equity and half of owners holding sub-4% first mortgages, renovating in place or moving via a second lien often beats surrendering the rate. It is the conversation nobody has, because it does not generate a listing.
The strength argument is not academic. It changes which move is correct.
Method and limits: the five-year breakeven is a simplified illustration dividing typical round-trip transaction costs of 7% to 9% by a 1.7% annual appreciation assumption. It excludes principal paydown, tax treatment, rent avoided, and local appreciation variance, all of which can shorten or lengthen the real breakeven substantially. Equity and rate figures reflect Realtor.com Q1 2026 outstanding mortgage analysis and ICE Mortgage Monitor data. None of this is individualized financial advice. Run your own numbers with a lender and a tax professional before acting on any of it.
Your holding period stopped being optional and became the whole analysis. At 15% appreciation, transaction costs of 7% to 9% are recovered in under a year, which is why 2021 buyers could move casually. At 1.7%, recovering those costs on appreciation alone takes roughly five years before you clear a dollar. If your horizon is under five years, you are buying a payment and a place to live, and you should evaluate the purchase on those terms honestly rather than on an equity story that will not arrive on schedule.
Renovation math flips from arbitrage to consumption. In a fast market, over-improving gets bailed out by the tide. At 1.7%, a $60,000 kitchen is a lifestyle purchase that returns a fraction at resale. Renovate for the years you’ll live there, not for a resale premium the market has stopped funding.
Waiting for rate relief is now the riskiest position on the board. This is the direct consequence of the strength argument. In a structurally weak market, waiting is rational because distressed inventory eventually arrives. In this one it does not, because there are very few forced sellers to produce it. What waiting actually buys you is the loss of the negotiating room, seller-paid buydowns, and builder incentives available right now, all of which evaporate the moment rates drop and sidelined demand returns at once.
Moving via equity beats moving via sale for a lot of owners. With roughly $204,000 in average tappable equity and half of all owners holding sub-4% first mortgages, the traditional sell-and-upgrade path often destroys more value than it creates. Renovating in place, or using a second lien to fund a move without surrendering the rate, is frequently the stronger play in 2026, and it is a conversation almost nobody is having because it does not generate a listing.
On financing, this environment rewards structure over rate shopping. Buydowns, lender credits, and loan type selection move the payment more than a quarter point spread between lenders. Four people I trust with that conversation:
- Andrew Bryan, Miramar Mortgage: andrewthelender.com
- Rachael Carter, My Texas Mortgage Team: mytxmortgageteam.com
- Jennifer Nelson, Eustis Mortgage: eustismortgage.com
- Taylor Fruge, Lower Mortgage: lower.com
I recommend these lenders based on their expertise and service. I do not receive compensation for referrals.
If you’re weighing new construction against resale in the southern corridor or relocating to North Texas, have the timing conversation before you tour anything. The North Texas market overview covers how the different parts of the metroplex compare.
Frequently Asked Questions
Is the housing market actually strong in 2026?
By structural measures, yes. Homeowner equity sits at a record 71.6% of total real estate value per Federal Reserve Z.1 data, negative equity is near 1.8%, and Texas transaction volume rose 4.5% year over year in Q2 2026. Price appreciation has slowed, which measures something different.
Why isn’t price appreciation a good measure of housing market health?
Appreciation measures how fast credit and speculation are entering the system. During the fastest appreciation years of 2004 to 2006, homeowner equity share was simultaneously falling to 58.9%, because leverage was manufacturing the price growth. Rapid appreciation frequently signals the opposite of stability.
How much equity do homeowners have compared to 2008?
Owners’ equity was roughly 71.6% of total household real estate value in Q1 2026, against 58.9% at the late 2006 bubble peak and 46.0% at the 2012 trough.
Wouldn’t a price decline wipe out that equity?
Applying a 10% national decline to the Fed’s Q1 2026 figures leaves an equity share near 68.5%, and a 20% decline leaves it above 64%. Both remain well above the 58.9% share homeowners held entering the last crisis. Because the measure is a ratio, it is also unaffected by inflation.
What percentage of homes are underwater in 2026?
Roughly 1.8% of U.S. mortgaged homes and 1.7% in Texas, against 22.8% – 23.7% at the 2011 to 2012 peak.
Is the housing market going to crash in 2026?
No primary source projects a 2008 style crash. A cascade requires large numbers of owners who are underwater, payment shocked, and unable to sell. Record equity, sub-4% fixed rates on half of outstanding mortgages, and Ability-to-Repay underwriting have removed all three conditions.
Why is my house not appreciating like it used to?
National growth has slowed to roughly 1.7% to 3.4% annually, near the 15th percentile of outcomes since 1975, driven by rates holding at 6.1% to 6.4%, elevated inventory in overbuilt Sun Belt markets, and slowing household formation.
Are Dallas Fort Worth home prices falling in 2026?
DFW posted 11 consecutive months of year over year price declines through early 2026 per the Texas Real Estate Research Center, while statewide full year forecasts still project a modest 1.3% gain and Q2 statewide transaction volume rose 4.5%.
Should I buy new construction or resale in Ellis County right now?
For a large share of buyers, new construction currently wins. The statewide new-to-resale price gap has compressed to roughly $15,000 from about $100,000 pre-pandemic, and builders are offering rate buydowns and closing cost incentives that resale sellers generally cannot match.
Are mortgage delinquencies rising?
Modestly and unevenly. MBA’s Q1 2026 survey showed 4.44% overall, up 40 basis points year over year, concentrated in FHA at 11.88% and VA at 4.99%, while conventional delinquency declined to 2.75%.
Does Texas have protections other states lack?
Yes. Texas caps home equity lending at 80% combined loan to value in its state constitution, Article XVI Section 50(a)(6), which ordinary legislation cannot repeal.
Is Ellis County still growing?
Yes. Population reached 240,867 in the most recent Census vintage, up 3.62% in one year, with 85% of growth from domestic migration.
This article is for general informational and educational purposes and is not a substitute for individualized financial, legal, or lending advice. All local market observations are based on publicly available price, permit, and inventory data. Nothing here is intended to encourage or discourage any reader’s choice of neighborhood, school district, or community on any basis protected under the Fair Housing Act, and I serve all buyers and sellers equally regardless of race, color, religion, sex, disability, familial status, or national origin. Compensation and referral practices comply with RESPA and current NAR settlement terms; nothing herein constitutes fixed or suggested commission rates.
Bobby Franklin is a REALTOR® with Legacy Realty Group – Leslie Majors Team, serving Ellis County and the greater DFW metroplex. For a personalized read on how these trends apply to your neighborhood and timeline, reach out at northtexasmarketinsider.com.
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