Grapevine police spokesman Sgt. Robert Eberling said the shooter showed up in the Santa outfit shortly before gunfire erupted and was a member of the family. The identity of the shooter and the victims will be released after autopsies are conducted Monday, he said.
Police went to the apartment midday Sunday after dispatchers received a phone call in which no one was on the line. They found four women and three men, aged 18 to 60, dead. A motive for the shootings remains unclear.
Investigators worked overnight, meticulously searching the apartment, along with three vehicles parked outside.
"It appears they had just celebrated Christmas. They had opened their gifts," Grapevine Police Sgt. Robert Eberling said Sunday, adding that the apartment was decorated for the holiday, including a tree.
Two handguns were found near the bodies, and it appears all died of gunshot wounds, he said.
Grapevine Police Lt. Todd Dearing said investigators believe that the victims were related, though some were visiting and didn't live in the apartment. He said police are looking for other relatives to inform of the deaths.
"Seven people in one setting in Grapevine, that's never happened before. Ever," Dearing said.
Many of the nearby apartments are vacant, and police said no neighbors reported hearing anything on a quiet Christmas morning when many people were not around.
Jose Fernandez, a 35-year-old heavy equipment mechanic who moved to the complex with his family about six months ago, said he always felt safe in the area, but is now afraid to let his 10-year-old son play freely outside.
"This is really outrageous especially on Christmas," said Fernandez, who was visiting family for the holiday and returned to find several police cars parked outside his home.
"This has shocked everybody. It has scared everybody. I guess something like this can happen anywhere, but seven people dead. It's just very scary," he added.
Associated Press writer Ramit Plushnick-Masti in Houston contributed to this report.