Texas Real Estate Market Update for Q2 2026: Statewide Prices, Inventory, and Rate Outlook

Texas Real Estate Market Update for Q2 2026: Statewide Prices, Inventory, and Rate Outlook

Is the Texas Housing Market Finally Stabilizing in 2026?

Texas home prices spent the better part of 2025 quietly softening, and the first quarter of 2026 confirmed what many buyers and sellers were already sensing: the statewide market has recalibrated. Bidding wars are the exception rather than the rule, inventory is the highest it has been since 2012, and sellers are offering meaningful price concessions to close deals. But that does not mean the market is broken. It means it is normal again.

TL;DR: The statewide Q1 2026 median sales price came in at $328,000, a 0.8% year-over-year decline and the first annual Q1 price drop in more than a decade, per Texas Realtors. Active listings statewide stand near 134,000-141,000 homes, months of supply runs roughly 4.5-4.8 statewide, and days on market have stretched past 80 days on average. The 30-year conforming rate is 6.36% as of mid-May 2026. Q2 typically brings a seasonal price uptick of 2-4%, so buyers who act in May or early June historically pay less than those who wait until July.

Statewide Q1 2026 Snapshot: What the Data Actually Shows

Texas Realtors released its Q1 2026 Texas Quarterly Housing Report in late April, and the headline figures tell a nuanced story.

Median sales price: $328,000 statewide in Q1 2026, down 0.8% from Q1 2025. This is the first time since the early 2010s that Q1 posted a year-over-year decline. The typical seasonal pattern from Q1 to Q2 (April through June) historically adds 2-4% to median prices as more move-up and premium inventory closes during peak spring buying season. That suggests a Q2 statewide median in the $334,000-$341,000 range is plausible if spring demand holds.

Active listings: By end of February 2026, the Texas Real Estate Research Center at Texas A&M (TRERC) reported approximately 134,400 active listings statewide, up roughly 10% year-over-year. March and April data from Norada tracking puts active inventory near 141,519 homes as of March 31, 2026, the highest level since at least 2014. More supply means buyers have real options and sellers must price competitively.

Months of inventory: TRERC's February 2026 data shows 4.8 months of supply statewide, the highest February reading in over a decade. A balanced market is generally considered 5-6 months. Texas is close, which is good news for buyers and a signal to sellers that days of automatic appreciation are behind us for now.

Days on market: Average DOM for closed sales rose to 82 days in February 2026, up from 74 days in 2025 and 67 days in 2024. For unsold inventory, the figure has climbed to roughly 99-110 days in some month-end snapshots. Sellers who price accurately from day one are still selling; overpriced listings are sitting.

Sales volume: Texas Realtors' Q1 report showed a slight overall increase in closed sales statewide, though the three largest metros (Dallas, Houston, and San Antonio) each posted volume declines of less than 2% year-over-year. The Texas Real Estate Research Center's full-year 2026 forecast projects approximately 349,000 total single-family sales statewide for the year, a 2.5% gain versus 2025.

Mortgage Rate Snapshot: 30-Year Conforming, FHA, and Jumbo in Texas

The rate environment in Q2 2026 has improved materially from a year ago, and that is showing up in affordability metrics across the state.

30-year conforming (Freddie Mac PMMS): The 30-year fixed-rate mortgage averaged 6.36% as of May 14, 2026, according to Freddie Mac's Primary Mortgage Market Survey. That is down from 6.81% a year earlier, a 45-basis-point improvement. The 15-year fixed averaged 5.71% the same week. The spring 2026 range has been approximately 6.23%-6.46%, offering buyers meaningful windows to lock at the lower end.

FHA in Texas: For 2026, Harris County (Houston) FHA loan limits sit at the floor of $541,287 for a single-family home, Travis County (Austin) at $571,550, and Dallas County at $563,500. FHA borrowers with a 580+ credit score can access a 3.5% down payment, making FHA a strong option for first-time buyers in Houston's sub-$500,000 price band.

Jumbo Texas: Jumbo rates (loans above the 2026 conforming limit of $806,500) have been tracking roughly 50-75 basis points above conforming, putting most Texas jumbo products in the 6.85%-7.10% range as of mid-May 2026. Houston's Heights, River Oaks, and Memorial neighborhoods regularly see jumbo originations, as does the Barton Hills and West Lake Hills corridors in Austin.

Worked Example: A buyer purchasing the statewide Q1 median of $328,000 with 10% down ($32,800) and a 6.36% rate on a 30-year conforming loan carries a principal-and-interest payment of approximately $1,840 per month. At last year's 6.81% rate, that same loan cost $1,950 per month. The $110 monthly savings may not sound dramatic, but it equates to $1,320 per year and reflects a genuine affordability improvement for buyers who were priced out in 2024-2025.

Big-4 Metro Snapshot: Houston, DFW, Austin, and San Antonio

Texas's four major metros are each telling a different version of the same story: more inventory, softer prices, and slowly improving sales volume.

Houston had a notably strong April. The Houston Association of Realtors' April 2026 report showed 8,196 single-family homes sold, up 4.4% year-over-year, with pending sales jumping 9.4%. HAR Chief Economist Dr. Ted C. Jones noted Houston's home sales have now surpassed pre-pandemic 2019 levels by 6.8%, bucking national trends where existing-home sales remain 22.4% below 2019 pace.

DFW continues to see supply-side pressure. DFW Agent Magazine's analysis of Texas Realtors data found DFW active listings up sharply as new listings entered at a pace buyers have not fully absorbed. The Fort Worth-Arlington-Grapevine submarket has held prices relatively flat while Frisco and Plano have seen steeper year-over-year corrections.

Austin remains the softest of the four major markets. Central Texas Housing Report data from Unlock MLS shows the Austin-Round Rock-San Marcos MSA ended Q1 2026 with 5.5 months of inventory and a median price of $415,300, the lowest March median since 2021. Sellers in Austin are frequently accepting offers $20,000-$30,000 below original listing price.

San Antonio offers the most accessible entry point among the big four. Zillow's April 2026 data puts the average San Antonio home value at $251,035, down 2.4% year-over-year, with homes going pending in roughly 42 days. The San Antonio Board of Realtors data mirrors this trend of modest price softening paired with improving buyer engagement.

Mid-Tier Texas Markets Worth Watching in Q2 2026

Not every Texas market is cooling. Mid-tier metros with diversifying employment bases are showing relative resilience. Zillow's forecast through March 2027 highlights the following:

College Station / Bryan: Anchored by Texas A&M University and a growing medical corridor, the Brazos Valley market is projected for modest flat-to-slightly-positive price movement through early 2027. Remote workers relocating from Austin and Houston continue to find value here, with median prices in the $250,000-$290,000 range.

Killeen / Fort Hood / Copperas Cove: The Central Texas triangle benefits from a stable military-employment base. Median prices near $200,000-$230,000 and a demand floor from Army post assignments provide support that discretionary markets lack.

Tyler: East Texas's largest city has held up better than many Gulf Coast markets. Zillow projects Tyler at +0.9% by March 2027, supported by healthcare, Christus Mother Frances Hospital, and steady in-migration from the Dallas suburbs.

Lubbock: Home to Texas Tech University and a growing healthcare sector, Lubbock averaged roughly 80-90 days on market in early 2026 but maintained prices near $195,000-$220,000. Zillow forecasts modest positive movement through summer 2026.

McAllen / Edinburg / Mission: The Rio Grande Valley continues to attract buyers priced out of San Antonio. McAllen is projected at +0.5% by June 2026 and +1.2% by March 2027, making it one of the few major Texas metros with a positive outlook over the forecast period. An internal look at affordable Texas options shows why buyers are increasingly looking beyond the I-35 corridor.

Texas Migration Trends: Still Net Positive, But Momentum Has Slowed

Texas has led the country in raw population growth for three consecutive years, but the pace has shifted. The Texas Tribune's January 2026 analysis of U.S. Census data found Texas added 391,243 residents in 2025, the most of any state, bringing the total population to 31.7 million. However, net international migration fell 48% to 167,475 new arrivals from abroad, and domestic in-migration also slowed, with only 67,299 net domestic movers arriving, far below the 222,154 seen at the 2022 peak.

The National Association of Realtors' analysis of 2025 Census data shows Texas still ranks first nationally for net migration overall (234,774), ahead of Florida, North Carolina, and South Carolina. Harris County (Houston) remains among the top three counties nationally for net international migration.

What does this mean for housing demand? Net positive migration continues to support the housing market's long-term floor, but the deceleration explains why the demand side cannot absorb the inventory surge at the pace seen in 2021-2023. The adjustment is orderly, not distressed.

H1 2026 Texas Legislative Session: Property Tax Relief for Homeowners

Texas's biennial legislative session produced meaningful property tax relief that homeowners and buyers should know about before making Q2 decisions.

The Texas Legislature passed Senate Bill 4, which increased the general school district residence homestead exemption from $100,000 to $140,000. For a homeowner in a median-priced Houston home assessed at $340,000, the exemption increase translates to roughly $500-$700 in annual school district property tax savings, depending on the applicable ISD tax rate (which typically runs $0.90-$1.10 per $100 valuation after the 2023-2024 rate compression).

Voters approved the change in a November 2025 constitutional amendment election, and it takes effect for the 2025 tax year (filed and processed in 2026). Homeowners who have not yet filed their updated homestead exemption with their county appraisal district should do so immediately. The Harris County Appraisal District (HCAD) processes exemption applications online and requires the homeowner to occupy the property as of January 1 of the tax year.

The Texas Comptroller's office administers the state's property tax data and rate compression formulas under Texas Property Tax Code Sec. 11.13. For buyers purchasing in Q2 2026, the effective benefit is that Q2 closing costs include a prorated tax year in which the $140,000 exemption already applies, reducing the tax proration owed at closing for homestead-eligible buyers.

For a deeper look at how these exemptions interact with closing costs, see Texas Closing Costs 2026.

What Buyers Should Do in Q2 2026

The combination of rising inventory, softening prices, and a 45-basis-point rate improvement from a year ago makes Q2 2026 one of the better buyer windows Texas has seen since 2019. Here is how to act strategically.

Get underwritten, not just pre-qualified. With 60-80+ day DOM in most markets, sellers are evaluating offers carefully. A full underwriting approval (not just a pre-qual letter) signals seriousness and can substitute for a higher price in some cases.

Request seller concessions for rate buydowns. Sellers in the $400,000-$700,000 price range are regularly contributing 1-2% of the purchase price toward a temporary or permanent rate buydown. On a $450,000 purchase, a $9,000 seller concession used for a 2/1 buydown drops year-one payments significantly and can offset several months of higher rates.

Use the inspection contingency fully. DOM of 60+ days suggests sellers have priced to move but may not have corrected deferred maintenance. Texas Realtors' standard TREC 1-4 Family Residential Contract gives buyers 10 days to inspect. Use all of it.

Target the $200,000-$330,000 price band. Per HAR April 2026 data, the sub-$250,000 segment saw sales volume jump 12.4-26% year-over-year in Houston. Affordability is improving at the entry level and demand is most competitive there; stepping into the $330,000-$450,000 range often means less competition and better negotiating leverage.

See our guide to new construction vs. resale in Houston 2026 for a full comparison of builder incentives versus resale seller concessions.

What Sellers Should Do in Q2 2026

Sellers who approach the Q2 2026 market with 2021 expectations will be frustrated. Sellers who approach it with current data will still transact successfully.

Price to the current comp, not the peak. With 67.6% of Texas homes selling below list price statewide per Zillow data, an overpriced listing will simply sit and accumulate DOM stigma. A sharp, accurate list price in the first 10 days generates the most competitive offers.

Front-load the visual presentation. Homes selling above list price today have one thing in common: professional photography, a 3D tour, and a compelling digital presence. In a market where buyers browse 60+ days before writing an offer, the listing that looks the best online gets shown first.

Offer a buyer's agent commission clearly in the MLS. Post the August 2024 NAR settlement, commission terms require transparency. Sellers who offer a competitive buyer's agent compensation attract more showings and typically net more; a clear offer avoids negotiation friction at the contract stage.

Leverage the $140,000 homestead exemption. If you are also buying your next home in Texas, the expanded exemption adds to your affordability on the purchase side. Work with a lender and your agent to coordinate the timing so you retain the exemption on your current home through the January 1 qualification date if you are selling late in the calendar year.

Frequently Asked Questions

What was the statewide Texas median home price in Q1 2026?

The statewide Q1 2026 median sales price was $328,000, a 0.8% decline from Q1 2025 and the first annual Q1 drop in over a decade, according to Texas Realtors' Texas Quarterly Housing Report released in April 2026. Prices varied widely by metro, from $415,300 in the Austin MSA to approximately $271,667 in San Antonio. The Texas Real Estate Research Center at Texas A&M forecasts a year-end 2026 statewide median near $334,000, which implies modest seasonal appreciation through Q2 and Q3.

How many months of inventory does Texas have going into Q2 2026?

Statewide months of inventory reached approximately 4.8 in February 2026 per TRERC, with total active listings near 134,400 at that point and rising toward 141,500 by end of March. A balanced market is typically 5-6 months, so Texas is approaching equilibrium from the low side. Houston is running tighter at roughly 4.5-5 months for single-family homes, while Austin is looser at 5.5 months, giving buyers in Austin more negotiating room than in Houston.

Will Texas home prices rise or fall in Q2 2026?

Most data points suggest a modest seasonal uptick of 1-3% in median prices from Q1 to Q2, as spring buying demand concentrates premium closings in April-June. However, the annual year-over-year comparison will likely remain slightly negative through at least Q2, given inventory pressure and the rate environment. Markets like McAllen, El Paso, and Tyler show positive trajectory, while Austin and San Antonio continue to lead annual declines among the big metros.

How does the Texas Legislature's $140,000 homestead exemption affect Q2 buyers?

Senate Bill 4, passed in 2025, raised the school district homestead exemption from $100,000 to $140,000. For a buyer purchasing a $330,000 home and filing for the homestead exemption with their county appraisal district, the additional $40,000 in exempted value reduces annual school district taxes by roughly $360-$440 (depending on the local ISD rate). The exemption requires the buyer to occupy the home as their primary residence as of January 1, and it must be filed with the county appraisal district annually until it auto-renews.

What is the 30-year fixed mortgage rate in Texas as of May 2026?

The 30-year fixed-rate mortgage averaged 6.36% as of May 14, 2026, per Freddie Mac's Primary Mortgage Market Survey. Texas borrowers may see rates slightly above or below that benchmark depending on credit score, loan-to-value ratio, and lender-specific pricing. FHA rates in Texas typically run 0.25-0.50% lower than conforming for well-qualified borrowers. Jumbo rates (above $806,500 in most Texas counties) are currently running in the 6.85%-7.10% range for primary residences with 20% down.

Talk Texas Real Estate With Harbert Group Before Rates Shift Again

The Q2 2026 window is genuinely favorable for informed buyers, and sellers who price correctly are still moving homes. The data is clear; acting on it is where the right agent makes the difference.

Erick Harbert and the Harbert Real Estate Group at Realty Right work specifically in the Greater Houston area and across Texas, using real MLS data to position buyers and sellers for results, not guesswork. Whether you are buying your first home, relocating from out of state, or deciding whether to list before summer inventory peaks, a 15-minute call can save you thousands.

Contact Erick today:

• Phone: (281) 305-2520
• Email: [email protected]
• Office: 6605 Cypresswood Dr Ste 300, Spring TX 77379
• Web: harbertgroup.com