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Texas Housing Market Update: What Fall 2026 Means for Buyers, Sellers, and Rental Owners

By DVC Realty TX · October 6, 2026 · 9 min read
Aerial view of a Texas suburban neighborhood of single family homes, illustrating the Texas housing market in fall 2026

If you have been waiting for the Texas housing market to either boom again or fall off a cliff, the latest numbers say neither one is happening. What we have instead is a market that has settled into balance, with more homes to choose from, prices holding mostly steady, and a lot of variation depending on which part of the state you are looking at. Here is what the newest data shows and what it means whether you are buying, selling, or holding a rental.

Key takeaways

The big picture: balanced, not broken

The Texas Real Estate Research Center's latest statewide look, built on June data, puts the Texas median sale price at about $342,900. That is only about 0.4 percent below a year ago, and the declines have been getting smaller, not bigger. Sales are actually moving the right direction. Texas closed 34,956 home sales in June, up 8.6 percent over last year, and sales for the year to date are running about 3.2 percent ahead.

Inventory is where the market really looks different from a few years ago. There were roughly 153,800 active listings statewide, which works out to about 5.4 months of supply. Six months is generally considered a balanced market, so Texas sits right around the line, maybe leaning slightly toward buyers. Homes that sold in June took an average of 62 days, just a touch slower than the 60 days we saw a year earlier. Realtor.com's count of Texas active listings came in at 138,054 in August, up only slightly from July, which tells us inventory is growing alongside sales instead of piling up.

Texas by the numbers

Rates are the wildcard

Most of the market data above runs through late September, and in just the few weeks since then, mortgage rates have gone nearly vertical. In mid September the 30 year fixed was sitting just under 7 percent. By October 1, Freddie Mac's weekly average was 7.28 percent, and daily rates have since moved into the mid 7 percent range. That is a big jump in a short time, and it changes the math for almost every buyer in the state.

Rates are now the single biggest factor in where Texas home prices go from here. If they keep climbing or stay elevated, buyers lose purchasing power, and that is the main thing that could push prices down further. A $342,900 median price sounds very reasonable compared to the coasts, but add a mortgage in the mid 7s, Texas property taxes, and today's insurance premiums, and the monthly payment gets real in a hurry.

It is also worth being realistic that rates in the 7 to 8 percent range could be with us for a while. Nobody should be building a plan around rates dropping back to 5 or 6 percent anytime soon. That is why so many deals right now come down to rate buydowns, closing cost credits, and builder incentives rather than the sticker price alone.

Every Texas metro is telling a different story

A statewide average hides a lot. The four major metros are moving in noticeably different directions, and that should shape your strategy more than any headline.

Austin is still in reset mode. The Unlock MLS August report shows a median sale price of $412,000, down 6.4 percent from last year, with about 5.1 months of inventory. Homes are closing at around 93 percent of list price on average, which means buyers have real room to negotiate. Interestingly, pending sales actually edged ahead of last year, so buyers are out there. They are just being pickier.

Houston is the opposite picture. HAR's July numbers show a single family median around $340,000, up 0.6 percent, with 5.5 months of supply and a record 40,750 active listings. Even with the most inventory Houston has ever recorded, prices held up because demand kept pace. Jobs and affordability are doing a lot of work there.

Dallas and Fort Worth sit somewhere in the middle. Price softness has been easing, and the Fort Worth and Arlington side has already posted modest year over year gains. San Antonio is still the softest of the big four on price and is working through extra supply, which can mean opportunity for patient buyers.

If you are buying

You finally have choices again. Five plus months of supply is a completely different experience than the bidding wars of 2021, and in many suburbs you can take your time, compare neighborhoods, and actually negotiate. Just do not assume every seller owes you a big discount. Houston proved this summer that a well priced home in a strong area still sells. Run your numbers at today's rates, not the rate you hope to refinance into later, and see how much a rate buydown helps. If you are looking at new construction, compare the net monthly payment, not just the list price. A builder incentive can be worth more than a 3 percent price cut on a resale that needs a new roof.

If you are selling

The market still moves when sellers price to the market. That median price cut of about $12,000 tells the story. Homes that start too high tend to sit, collect days on market, and end up chasing the market down one reduction at a time, which almost always nets less than pricing it right on day one. In Austin especially, buyers are anchoring off falling year over year numbers and that 93 percent close to list ratio, so your pricing needs to reflect real recent comps, not last year's highs.

If you own or are buying a rental

For investors, this market rewards discipline over chasing the hottest zip code. With purchase prices in the mid $300s across much of the state, diverse job markets, and strong population growth, Texas still pencils out for steady cash flow in the right areas (here is how Texas compares to the rest of the country), even with borrowing costs now pushing toward 8 percent. Just make sure the deal works at today's rate and would still work if rates stay in the 7 to 8 percent range for the next few years. Houston and many DFW suburbs may not be flashy, but they tend to hold up well when you look at debt service and long term durability. Austin's correction can create good entry points, but keep your rent assumptions conservative since rents there are still adjusting after the boom years.

Whatever you buy, underwrite it honestly. Budget for landlord insurance, property taxes, HOA dues, and reserves, and check whether new construction nearby will compete with your rent comps. Population growth is a great tailwind in Texas, but it is not a substitute for reserves when your taxes and insurance reprice at renewal.

Our take for the rest of 2026

Heading into the end of the year, Texas looks balanced and very local, with statewide prices near the mid $340s and inventory in the mid five month range. The big unknown is rates. With the 30 year fixed jumping into the mid 7s since late September, well above the 6.8 percent year end rate Fannie Mae was forecasting just weeks ago, the rate picture will do more than anything else to decide whether prices hold steady or soften further from here, and it is entirely possible rates stay in the 7 to 8 percent range for some time. The smartest move right now is to plan around today's rates, stay realistic on price whether you are buying or selling, and look at the numbers for your specific city and neighborhood, not the statewide headline.

That is where we come in. DVC Realty TX helps Texas owners buy, sell, lease, and manage single family homes, and we manage rentals for one flat monthly fee, never a percentage of your rent, across DFW, Houston, Austin, San Antonio, the Hill Country, and Tyler. Whether you are deciding to sell, wondering what your home would rent for, or adding a property to your portfolio, we are happy to run a free rental analysis or pull local comps for you with no obligation.

Frequently asked questions

Is the Texas housing market going to crash?

The current data does not point to a crash. Statewide prices are only about 0.4 percent below last year, sales are up, and inventory sits around 5.4 months, which is close to a balanced market. The bigger risk is mortgage rates. With the 30 year fixed in the mid 7 percent range, higher rates are the main factor that could push prices down further.

What is the median home price in Texas in 2026?

The Texas median sale price was about $342,900 in June 2026, according to the Texas Real Estate Research Center, roughly 0.4 percent lower than a year earlier. Prices vary a lot by metro. Austin's median was $412,000 in August and Houston's single family median was about $340,000 in July.

What are mortgage rates right now?

Freddie Mac's weekly survey put the average 30 year fixed rate at 7.28 percent on October 1, 2026, up from 6.95 percent in mid September and the highest level since October 2023. Daily rate trackers showed rates around 7.56 percent by October 6. Rates in the 7 to 8 percent range could stick around for a while.

Is Texas a buyer's market or a seller's market right now?

Texas is close to balanced and leans slightly toward buyers, with about 5.4 months of inventory statewide. Austin is the most buyer friendly major metro, with homes closing around 93 percent of list price. Houston is more balanced because demand has kept pace with record listings.

Which Texas city has seen the biggest home price drops?

Austin has seen the largest decline among major Texas metros, with an August 2026 median sale price of $412,000, down 6.4 percent from a year earlier. San Antonio is also soft on prices, while Houston and Fort Worth have posted small year over year gains.

Is now a good time to buy a rental property in Texas?

It can be, if the numbers work at today's rates. More inventory and less competition give investors negotiating power, and Texas still offers population growth and no state income tax. Underwrite every deal at current mortgage rates, budget for taxes, insurance, and reserves, and make sure it still cash flows if rates stay in the 7 to 8 percent range.

This article is general market information, not investment, tax, or legal advice. Market conditions change quickly and vary by neighborhood, so do your own due diligence and consult the right professionals before making a decision.

Sources and further reading

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