Texas Housing Market 2026: Forecast, Home Prices, Affordability & Predictions

If you have been tracking the Texas housing market 2026, you already feel the shift. The frenzy is not fully “over” everywhere, but it is no longer the default setting. Listings are sticking around longer, buyers have more room to negotiate, and some sellers are learning the hard way that 2021 pricing is not guaranteed in 2026.

The big picture is simple: Texas is moving from “always hot” to “selectively hot.” Some metros will still see healthy demand and stable pricing. Others, especially the markets that overheated during the pandemic boom, are now dealing with higher inventory, softer competition, and more price cuts.

This report breaks down the Texas housing market forecast 2026 using fresh data from the Texas Real Estate Research Center’s 2026 Texas Real Estate Forecast, recent statewide market conditions reported in Texas Housing Market Weakens As 2026 Begins, and Redfin’s 2026 outlook in Housing Market Predictions for 2026. For a state-by-state comparison, you can also reference our California Housing Market 2026 guide.

Texas Housing Market Forecast 2026: What the Data Actually Says

Let’s start with the forecast, because that is what most people searching “Texas housing market forecast 2026” really want.

According to the Texas Real Estate Research Center (TRERC), Texas home sales are projected to rise modestly by 2.5% in 2026 to about 349,000 new and existing homes. TRERC also projects the median home price up about 1.3% to around $334,000. On the financing side, TRERC’s macro assumptions include a 30-year fixed mortgage rate in the 5% to 5.6% range by December 2026, with a Fed Funds target range of 3% to 3.5%.

That is the “base case” outlook: not a boom, not a crash. More like a normalization year where modestly easier financing offsets a market that has already cooled.

Now compare that to what Texas looked like entering 2026.

A Texas Housing Insight summary (via TRERC’s analysis of November 2025 MLS data), reported by National Mortgage Professional, showed statewide home sales down 8% year over year, months of supply around 5.2, and longer timelines both for sold listings (about 72 days on market) and unsold inventory (about 103 days). The statewide median in that same snapshot was around $333,000.

Put those together and the story becomes clearer: the market cooled meaningfully in late 2025, and 2026’s forecast is essentially a mild rebound driven by rates easing and demand stabilizing, not a return to chaos.

Texas Home Prices 2026: Mostly Flat, But Not Even Across Metros

If someone asks, “Are Texas home prices going up or down in 2026?” the honest answer is: both, depending on the metro and the price tier.

Statewide, TRERC’s forecast calls for a small increase in the median price to about $334,000 in 2026, as outlined in the 2026 Texas Real Estate Forecast. But the late-2025 data shows pricing pressure already showing up in several major markets. The Texas Housing Insight summary cited by National Mortgage Professional noted year-over-year declines in San Antonio (down about 1.8%) and Austin (down about 2.5%), with downward pressure also mentioned in parts of Dallas-Fort Worth and continued (though slower) declines in Houston.

This is why Texas feels confusing right now. At the statewide level, prices look stable. At the metro level, some of the most talked-about boomtown markets are still working through a correction.

Austin Housing Market 2026

The Austin housing market in 2026 is one of the most striking examples of what happens after a boomtown overheats. According to Zillow's home value data, the average home value sits at roughly $494,727, with the broader median range landing between $500,000 and $525,000 depending on the price tier and neighborhood. That still sounds like a solid number — until you look at the direction it's heading.

Austin is down approximately 3.6% year-over-year heading into 2026. For a city that spent three years as the poster child of the pandemic housing boom, that's a meaningful shift. Inventory has climbed, homes are taking longer to go under contract, and sellers who priced based on 2021–2022 comps are learning the hard way that the market has moved on. Real estate reports from late 2025 documented the early signs of this correction, and those trends have continued into 2026.

Why Is Austin Cooling?

The short answer is that Austin overbuilt. New construction flooded the market during the remote-work migration wave, and supply has been running ahead of demand ever since. Layer on top of that the surge in homeowner insurance costs — Texas has seen some of the steepest increases in the country due to storm exposure and weather-related risk — and the true monthly cost of owning a home in Austin has climbed even in neighborhoods where the list price has dropped.

Redfin's 2026 housing market predictions specifically name Austin as one of the markets most likely to cool further this year, pointing to insurance costs, natural disaster risk, and the reversal of pandemic-era remote work patterns. For a city that grew so heavily on tech relocation, the return-to-office trend is a genuine headwind. The Texas Real Estate Research Center's January 2026 Housing Insight confirms the broader statewide softness feeding into Austin's numbers.

And then there's the broader context: the New York Post reported price cuts sweeping across Austin, San Antonio, Dallas, and other Sun Belt metros in early 2026 — a signal that Austin is not an outlier but part of a wider rebalancing across markets that got too far ahead of themselves.

What This Means If You're Buying or Selling in Austin

If you're a buyer, 2026 is genuinely the most favorable Austin market in years. Days on market are longer, price reductions are more common, and inspection contingencies — which largely disappeared during the frenzy — are a normal part of transactions again. Entry points exist right now that simply weren't available in 2021 or 2022.

If you're a seller, the most important adjustment is mental: price to today's market, not to memory. Listings that come in anchored to peak-era valuations are sitting. Austin still has strong long-term fundamentals — the job market, the culture, the infrastructure investment — but buyers in 2026 are disciplined and data-driven in a way they weren't a few years ago. Meeting them where they are is the only strategy that works right now.

Austin at a glance: ~$494,727 average home value (Zillow) · −3.6% year-over-year · Inventory up, days on market rising · Buyers have negotiating power for the first time in years. 

Dallas Housing Market 2026

The Dallas housing market in 2026 is the most complicated of the three major Texas metros — and also the one showing the sharpest correction. Redfin's current median sale price for Dallas sits around $375,000, while Zillow's average home value tracks lower at $301,697. You'll also find some sources reporting a median closer to $425,000–$435,000 depending on how the geographic boundary is drawn. All three figures tell a consistent story: DFW is a large, diverse market where the number you see depends heavily on which part of it you're looking at.

Year-over-year, Dallas is estimated to be down 4.1% — the steepest decline among the major Texas metros, and a notable reversal for a region that was consistently among the country's top-performing markets just two years ago. Dallas market reports from early 2026 confirm the trend across multiple submarkets, with the outer suburbs feeling the most pressure. 

The DFW Supply Story

Dallas-Fort Worth built aggressively during the pandemic boom years, and that wave of new construction is now doing what new supply always does in a softening market — it presses on prices. The outer suburbs took on the most construction: McKinney, Frisco, Prosper, and similar communities saw record permit activity, and they're now seeing some of the softest pricing as that inventory works its way through the system. Closer-in neighborhoods with tighter supply constraints are holding up better.

This patchwork reality is why zip code matters more than the headline number when you're making decisions in the Dallas market. A buyer shopping in a supply-constrained inner suburb is in a genuinely different market than someone looking at new construction in a growth corridor where three builders are competing on the same street. Homebuyers navigating the DFW market in 2026 are increasingly being advised to think local rather than metro-wide.

Dallas Outlook Through 2026

The good news for Dallas is that the correction looks like a normalization, not a collapse. The TRERC's 2026 Texas Real Estate Forecast calls for modest statewide price recovery through the year as mortgage rates ease toward the 5%–5.6% range. Dallas has the underlying fundamentals to participate in that recovery — strong job growth, consistent population inflow, and a diversified economy that is not dependent on any single sector.

For buyers, 2026 is an opportunity window in Dallas that hasn't been open since before the pandemic. For sellers, the playbook is straightforward: price accurately, present well, and don't anchor to what Zillow said in 2022.

Dallas at a glance: Redfin median ~$375,000 · Zillow avg. ~$301,697 · −4.1% YoY · Steepest correction among major TX metros · Submarket variation is high — research at the zip code level. 

Houston Housing Market 2026

If Austin is the cautionary tale and Dallas is the complicated middle, the Houston housing market in 2026 is the relative bright spot among Texas's major metros — and one of the few large cities in the state actually posting positive year-over-year price growth. Redfin's median sale price for Houston sits at around $324,200, while Zillow's average home value tracks at $260,149. The gap between those two figures says something important about Houston's geography: it is a massive, sprawling metro where the Inner Loop and the outer suburbs are genuinely different markets.

Either way, Houston remains the most affordable entry point among Texas's major metros. At $260,000–$324,000 depending on how you slice it, the monthly payment math works for a meaningfully wider pool of buyers than in Austin or even Dallas. That affordability advantage is one of the main reasons the Houston housing market has been described as buyer-friendly in 2026 — not because it's distressed, but because buyers here have real options and real leverage.

Why Houston Is Holding Up

Houston didn't experience the same vertical price spike that Austin did during the pandemic years. Its more abundant land supply, permissive development policies, and historically lower price floor meant valuations never got quite as stretched — which in turn means there's less of a correction bubble to deflate right now. The city that looked boring compared to Austin in 2021 is looking a lot more stable in 2026.

The other factor is economic diversification. Houston's energy sector gets most of the headlines, but the city has built significant scale in healthcare, logistics, and aerospace over the past decade. That employment base is holding up demand even as the broader Texas market softens. And with new communities continuing to come to market across greater Houston, inventory is growing — but it's being absorbed more steadily than in the metros where the supply surge outran demand entirely.

Who Houston Works For in 2026

For first-time buyers, Houston is the most realistic path into Texas homeownership among the major metros. The price point is lower, the market is calmer, and affordability is actually improving as mortgage rates ease. For investors, the cash flow math tends to work better here than in Austin given the lower acquisition costs — rental demand is strong and yields are more predictable. For sellers, the market is stable: not a frenzy, not a standoff. Correctly priced homes are moving at a reasonable pace.

Houston at a glance: Redfin median ~$324,200 · Zillow avg. ~$260,149 · +3.2% YoY · Only major TX metro with positive growth · Most affordable major market in the state. 

Texas Average House Price 2026

Pull back from the individual metros and the Texas average house price in 2026 tells a surprisingly calm story. The statewide median sits in the $340,000–$350,000 range based on the most recent data — slightly above TRERC's end-of-2025 benchmark of $333,000 and broadly consistent with a market that is stabilizing rather than swinging in either direction. According to the Texas housing market report from Texas Lending, the broader trend is one of gradual normalization after several years of unusual volatility.

The statewide figure is effectively the average of three very different metro stories: Austin pulling prices up while declining year-over-year, Dallas recording the sharpest correction, and Houston holding steady with modest positive growth. When you blend those together, you get a number that looks almost boring — which is arguably the point. TRERC's 2026 forecast projects the statewide median rising a modest 1.3% through the year to around $334,000 by December 2026, driven by mortgage rates easing and buyer demand gradually recovering from the rate shock of 2023–2024.

The takeaway for anyone tracking Texas real estate: the statewide average is a useful starting point, but it's a smoothed number that can obscure meaningful metro-level differences. A buyer or investor who acts on the statewide headline without drilling into local supply, days on market, and price trends at the zip code level is working with incomplete information. Texas in 2026 is not one market — it's a collection of markets that happen to share a state line.

Redfin’s 2026 Prediction: Why Texas Could Cool in Key Areas

Redfin’s 2026 predictions land on a point that matters a lot for Texas sellers and investors: some markets will cool because of insurance costs, disaster risk, and remote-work dynamics reversing.

In Housing Market Predictions for 2026, Redfin predicts that “homes will languish on the market… along with Texas,” tying the slowdown to natural disasters and surging insurance costs, plus pandemic-era remote workers moving back to where their office is located. Redfin also warns that “people who need to sell may be forced to take a loss.”

Redfin’s list of housing markets most likely to cool down in 2026 includes San Antonio, TX and Austin, TX, along with Nashville and several South Florida metros, as shown in the same Redfin 2026 predictions article.

If you have been watching Austin in particular, the takeaway is consistent with recent headlines: a boomtown that built aggressively is now seeing the other side of the cycle.

Inventory and Days on Market: The Quiet Story Behind Buyer Leverage

When buyers say “it feels easier,” they are usually reacting to two things: more inventory, and more time to decide.

In the Texas Housing Insight summary cited by National Mortgage Professional, active listings were described at around 5.2 months of supply, with sold homes spending about 72 days on market and unsold inventory lingering about 103 days on average.

That kind of environment changes behavior fast. Buyers make more below-list offers. Inspection negotiations come back. Sellers who are not priced correctly sit.

It is not 2008. It is just a market that has stopped rewarding aggressive pricing by default.

Texas Housing Affordability 2026: Improving If Rates Ease, But Still Not “Easy”

Affordability in Texas is still better than many coastal states, but the direction of affordability in 2026 depends heavily on rates.

TRERC’s outlook assumes meaningfully lower borrowing costs by the end of 2026, with a 30-year fixed mortgage rate in the 5% to 5.6% range as outlined in the 2026 Texas Real Estate Forecast. If rates follow anything close to that path, monthly payments ease and buyer demand becomes more “normal,” which is one reason TRERC forecasts a modest rebound in sales.

At the same time, Texas has a very real supply story in certain markets because the state built aggressively. TRERC notes that after a broad slowdown in 2025, single-family permits are forecast to rise about 1% in 2026 to roughly 155,000 units, also in the TRERC forecast. More supply helps affordability long-term, but in the short term it can keep pressure on prices in metros that are already oversupplied.

A 2026 Cost People Forget: HOA Fees Are Now Part of the “New Normal”

Housing affordability is not just home price and mortgage rate anymore. The “all-in monthly cost” is what breaks budgets, and HOA fees increasingly show up in that math.

A Realtor.com report distributed via PR Newswire found that nearly 44% of U.S. homes for sale had HOA fees, rising from 34.3% in 2019 to 43.6% in 2025, and noted the median HOA fee rose to $135 in 2025, as detailed in Nearly 44% of U.S. Homes for Sale Now Carry HOA Fees as Dues Continue to Climb, Realtor.com Finds.

That matters in Texas because so much new housing inventory is in planned communities where the HOA is not optional. If a buyer is stretching to qualify, $135 a month can be the difference between “approved” and “not happening,” especially once insurance and taxes are layered in.

What This Means for Renters, Investors, and Property Managers in 2026

Renters: if rates stay higher for longer, more households remain renters by necessity. If rates drift down, some renters convert to buyers, but only if inventory and monthly payments make sense.

Investors: a flatter price environment changes the playbook. You can no longer assume appreciation bails out a thin deal. Cash flow, vacancy assumptions, insurance costs, and HOA dues matter more.

Property managers: more HOAs and more professionally managed communities is a long-term tailwind for operational platforms. With nearly 44% of listings carrying HOA fees nationally, the administrative workload that comes with associations is not shrinking, based on the Realtor.com HOA report via PR Newswire.

Is the Texas Real Estate Market 2026 a Buyer’s or Seller’s Market?

At the statewide level, late-2025 conditions already looked closer to balanced than “seller-dominant,” with supply around 5.2 months in the Texas Housing Insight summary reported by National Mortgage Professional. That is why buyers are starting to feel leverage again.

But Texas is not one market. In 2026, it is more accurate to say some metros and price tiers are buyer-leaning, especially where new construction is heavy, while some submarkets are still competitive, especially where supply is structurally tight.

If you are buying, treat Texas as a patchwork, not a headline.

Looking Ahead: Texas Housing Market Predictions 2026

Here are the biggest variables to watch through 2026:

Mortgage rates: TRERC assumes meaningful easing by year-end 2026 in its 2026 Texas Real Estate Forecast. If that happens, demand improves.

Insurance and disaster risk pricing: Redfin explicitly ties Texas cooling risk to surging insurance costs and disaster exposure in its 2026 housing predictions.

Remote work reversal: Redfin also points to pandemic-era remote workers moving back closer to offices in the same Redfin predictions article.

New supply: Texas is still building. TRERC forecasts single-family permits increasing to roughly 155,000 units in 2026, as outlined in the TRERC forecast. That supports affordability long-term, but it can keep certain metros softer in the short term.

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