Mark Sprague | 2026 Texas Real Estate Outlook | A More Balanced Market Takes Shape
Mark Sprague April 23, 2026
Mark Sprague April 23, 2026
The 2026 real estate landscape is shaping up to be steadier, more balanced, and far less dramatic than the boom-and-bust cycles of recent years. Think: gradual affordability improvements, rising inventory, and moderate not explosive price growth. Mortgage rates are projected to hover around 6%, shaping much of the year’s buying and selling behavior.
Mortgage rates are expected to ease into the 6% range throughout 2026, slightly improving affordability compared to 2025. However, rates are unlikely to fall significantly below 6%, meaning we won’t see a repeat of the explosive buyer surge or the refinancing frenzy of 2020 to 2022.
But things shifted quickly this year:
Following the late February 2026 U.S. strike on Iran, mortgage rates jumped. On February 27, the 30 year fixed rate was 5.99%. By early March, it climbed to around 6.5% still lower than the long term 50 year average of 7.7% but enough to reshape buyer sentiment and affordability.
In Texas, resale homes typically make up 70 to 80% of active listings, though builders have claimed increased market share by offering incentives and rate buy downs.
As of March 2026, resale inventory has surged month over month:
Active listings are up sharply across Texas
Many properties are experiencing 2 to 3% price reductions from the last list price translating to about 9% off original pricing
Inventory levels are reaching peaks not seen in 15+ years
This shift gives buyers more leverage, more options, and more time pushing the market toward long awaited balance.
Central Texas / Austin
Inventory continues rising, softening the market
Median prices ticked up in March but remain well below 2022 peak levels
Appreciation is returning to more typical, historical patterns
Central South Texas / San Antonio
San Antonio is in the midst of a “Great Housing Reset”:
Modest price growth of 1.7 to 1.8% year over year
Rising inventory
More negotiating room for buyers
A clear shift toward buyer friendly dynamics
North Texas / DFW
DFW is approaching a balanced environment:
4 to 5 months of inventory
Moderate price stabilization
Budget conscious buyers are driving faster price corrections
Collin and Dallas counties remain the most balanced
Houston
Houston is trending toward a stable, moderately growing market:
Projected 2 to 2.5% sales increase in 2026
More buyers re entering as affordability improves
Rising inventory across the region
Home Prices
Statewide, expect stability, not a downturn. Median prices are projected to rise 1.3 to 1.5% over the next year. Some regions may soften slightly others will hold steady.
Days on Market
Homes are staying active longer, giving buyers breathing room and more negotiating power.
Seller Conditions
Still favorable but not universally.
Overpriced and “needs work” homes are sitting and buyers are increasingly selective especially with higher inventory.
Other Key Market Dynamics
Rental Market
Rent growth stabilizing
A wave of new apartment deliveries enhances supply
Absorption rates expected to stay strong through 2026 to 2027
Mixed signals across sectors:
Industrial
Strongest in Dallas and Houston
Slower in San Antonio
Tariffs are slowing South Texas demand
Cross border logistics boosting needs north of the border
Multifamily
Struggling due to heavy supply
Higher reliance on debt funds and private financing
The market requires time to rebalance
Watch for a possible credit crunch within 2 to 3 years
Office
Urban cores remain flat
Suburban office demand is growing easier commutes more parking
Virtually no financing is available for downtown high rise projects
Retail
High occupancy and strong performance
Continued growth especially west and south
Still a sector to approach with caution
Outlook
Moderate growth pursued with tight credit discipline
Typical leverage is around 65% dependent on cash flow
Regulators heavily scrutinizing CRE loan portfolios
Key Concerns
Heightened political influence over Federal Reserve decisions
CRE oversupply in certain segments
Multifamily overbuilding risks
Rising energy prices and slowing CPI
Texas growth is still strong but not guaranteed indefinitely
Lean into strengths in residential prices are expected to continue appreciating.
Expect ongoing challenges in commercial sectors.
Monitor reserves delinquencies and energy pricing.
Avoid speculative assets.
Prioritize job creation critical for both residential and commercial stability.
2026 should outperform 2025 for residential real estate with modest 3 to 4% appreciation and the best buyer’s market Texas has seen in over 16 years.
Commercial markets however will remain uneven and challenged across most sectors.