Distributed scatterer interferometric synthetic aperture radar (DS InSAR) technology has been widely used in various fields. Homogeneous pixel selection and DS phase optimization are two critical steps in DS InSAR time series method. Homogeneous pixel selection is a crucial step in the use of DS InSAR, directly affecting the estimation precision and reliability of subsequent parameter calculations. The existing algorithms for selecting homogeneous pixels have inherent limitations, such as requiring many heterogeneous samples and strict requirements surrounding the required number of synthetic aperture radar (SAR) images. To address these problems, a new sequential selection algorithm for homogeneous pixels is proposed, based on the Baumgartner–Weiss–Schindler (BWS) test algorithm and dynamic interval estimation (DIE) theory. This method utilises the advantages of the BWS algorithm (i.e., the proposed method can be easily applied and is at least as powerful as the commonly used non-parametric tests). Additionally, the proposed method is more sensitive to differences between the tails of the sample and is more powerful for small samples. The proposed method also has the high computational efficiency of the interval estimation theory. According to Monte Carlo simulation experiments, the average standard deviation (STD) of the mean of the rejection of the BWS-DIE algorithm under six sample conditions is 0.014. Compared with three existing algorithms, including the Kolmogorov‒Smirnov (KS), BWS and fast statistically homogeneous pixel selection (FaSHPS) algorithms, the BWS-DIE algorithm improves homogeneous pixel selection precision by 64.3%, 69.4% and 25.3%, respectively. In the real data experiment, 12 scenes of Advanced Land Observing Satellite-1 Phased Array type L-band Synthetic Aperture Radar (ALOS-1 PALSAR) data from February 2007 to March 2011 were used and the BWS-DIE multitemporal InSAR (MT InSAR) method based on the BWS-DIE algorithm was applied to surface subsidence monitoring in the western mining area of Xuzhou, Jiangsu Province, China. The experimental results show that, compared with the Stanford Method for Persistent Scatterers (StaMPS), the BWS-DIE MT InSAR method improves the ability to monitor the maximum subsidence by 12.3%, increases the point density by 5.7 times and decreases the root mean square error (RMSE) by 50%. In addition, new surface deformation patterns are found in the spatial-temporal evolution. The above experimental results show that the proposed BWS-DIE algorithm exhibits remarkable advantages in selection power and selection precision and is not limited by the number of SAR images. The proposed algorithm can further broaden the application scenarios for DS InSAR and provide high-quality and reliable monitoring data for subsequent scientific research.