Houston Housing Market Forecast 2026

We hope you find our 2026 Houston housing market forecast helpful and encourage you to sign up for Texas Housing Weekly for regular updates.

Houston housing market forecast for 2026

Houston Housing Market Predictions for 2026

A summary of what we expect to see over the next year:

Home Price Forecast for 2026: Mostly Flat

Houston-area home prices have declined a bit over the past year, and that downward trajectory could stretch into the first part of 2026.

The following chart shows the median home price for the Houston-The Woodlands metropolitan area going back several years, based on data from Zillow.

A couple of things will jump out at you:

  • Notice how prices skyrocketed during the pandemic, rising by nearly $90,000 in just two years.
  • You can also see where prices hit an all-time high in 2022 before flattening and declining a bit.

Recent housing market forecasts for the Houston area suggest that prices could remain mostly flat during 2026, neither rising nor falling by a substantial amount.

Analysts from Zillow, for example, predicted that the metro-wide median home price will rise by just 0.4% from October 2025 to October 2026.

Inventory Growth Will Benefit Buyers

Houston housing market predictions suggest that buyers could soon have a window of opportunity for purchasing a home at the bottom of the current market cycle.

But there’s more good news as well. Housing market inventory in the Houston area has increased over the past couple of years, giving buyers a better chance of finding a house.

As of late fall 2025, the metro area had about a 4.5-month supply of homes for sale. That was higher than the national average of 3.5 months.

According to an October Realtor.com report, active real estate listings in the Houston-Pasadena-The Woodlands metro area rose more than 22% over the previous 12 months.

This trend benefits buyers by offering more options and reducing the chance of bidding wars. It also pressures sellers to price their homes competitively.

The Market Pace Is Still Sluggish

The Houston housing market has been moving at a slower pace lately. This sluggishness will likely continue into 2026, with some forecasts predicting below-average sales activity.

As of October 2025, homes listed for sale across the Houston metro area spent a median of 60 days on the market before going under contract. That’s up from 49 days a year earlier and 34 days two years ago.

Historical hindsight: The median time on market for Houston sank to 11 days during the pandemic, when the real estate market accelerated.

Home buyers can benefit from this trend. A slower sales pace gives buyers more time to compare properties, evaluate list prices, and perform inspections.

Current trends and forecasts suggest that Houston-area home buyers will have more time to decide in 2026 while feeling less rushed.

Population Growth to Be a Factor in 2026

The Houston area’s population has swelled in recent years. This increases the demand for housing and puts upward pressure on home prices.

This is one of the reasons why home prices are expected to hold steady in 2026 rather than declining further.

According to a 2025 report from the U.S. Census Bureau:

“Houston-Pasadena-The Woodlands increased by over 198,000 people [from 2023 to 2024], second only to New York-Newark-Jersey City, NY-NJ in numeric growth.”

Migration is a major driver of growth. The Houston region consistently ranks among the top U.S. metros for both international and domestic in-migration. Many newcomers arrive from higher-cost cities where housing and living expenses are significantly higher.

Houston’s relatively affordable housing market, combined with Texas’s lack of a state income tax, makes it an appealing destination for families and professionals alike.

Population growth will continue to support the Houston-area real estate market in 2026, while preventing any major declines in home values.

Micro-Markets Can Vary Significantly

The Houston metro area is one of the most diverse housing markets in the country, both economically and geographically.

Stretching across multiple counties and dozens of cities, the region includes everything from urban neighborhoods and historic districts to sprawling suburbs and rural outskirts.

While this report provides an overall outlook for the greater Houston housing market, local conditions can vary greatly.

Areas where buyer demand is stronger:

  • The Heights, Houston (Inner Loop) — This historic, walkable neighborhood near downtown Houston remains highly desired. Median home prices are higher and inventory is tight. 
  • River Oaks and similar luxury enclaves — Luxury homes still sell briskly when well presented, with limited supply helping support demand in the top tier. 
  • Master-planned western/northern suburbs such as Cypress, Katy, and The Woodlands (north of Houston). These suburbs show strong sales volumes, good schools, new construction, and many buyer move-ins. 
  • More affordable suburban growth zones like Waller, Crosby, and Hockley. These markets tend to see strong sales activity because they offer newer homes and affordability compared to inner markets. 

Areas where demand is weaker:

  • Older suburbs or built-out communities where land and new construction have slowed, such as Sugar Land, Texas or Pearland, Texas. For example, Sugar Land has very limited new home supply and slower growth. 
  • Some lower-income or industrial-adjacent neighborhoods where price pressure or infrastructure constraints have held back demand. For example, Houston’s Settegast neighborhood showed large appreciation in value but low household income growth, suggesting constrained local demand.

Buyers and sellers should monitor market trends within their individual cities or neighborhoods to get the most accurate picture of what’s happening.

Timely Advice for Both Buyers and Sellers

We’ve covered a lot of real estate market trends in this forecast report. But what does it all mean for the typical home buyer or seller?

Here are some practical tips and suggestions on how to succeed when buying or selling a home in the Houston area in 2026…

Tips for Houston Home Buyers in 2026

Based on the forecast of a softening market with high inventory, buyers have a unique window of opportunity.

  • Consider the early 2026 window. Forecasts suggest that home prices will fall in the first part of the year before bottoming out in the second half. Home buyers who make a purchase during that timeframe could capitalize on “rock bottom” prices.
  • Use your negotiating leverage. With a 4.5-month supply of homes and a median 60 days on the market, buyers have leverage. Don’t just negotiate on price; consider asking for seller concessions like a closing cost contribution or an interest rate buydown.
  • Analyze the micro-market. Don’t just look at metro-wide stats. A “buyer’s market” in Sugar Land (with its limited new-home supply) can differ greatly from a highly competitive “seller’s market” in The Heights or a fast-growing new-build market in Crosby or Hockley.
  • Explore new construction incentives. In growth zones like Katy and Cypress, builders are competing with a high volume of resale homes. Some offer major incentives, like rate buydowns or included upgrades. These can be more valuable than a small price cut on a resale property.
  • Take advantage of the slower pace. With bidding wars unlikely and homes sitting longer, use that time for thorough due diligence. Get the necessary inspections (general, foundation, pest) and don’t feel rushed into waiving contingencies.

Tips for Houston Home Sellers in 2026

With high inventory and a slower pace, sellers have to be strategic and realistic.

  • Price it based on today’s market. With prices down year-over-year and inventory up 22%, you’ll want to price your home based on recent sales data. Overpricing to “test the market” could lead to a stale listing and frustration.
  • Consider buyer incentives. Don’t wait for buyers to ask for concessions—advertise them upfront. Offering an interest rate buydown can help your home stand out among a sea of listings, for less cost than a major price reduction.
  • Don’t make the buyer fix it. In a market with a 4.5-month supply, buyers don’t have to choose a “project.” They will simply move on to the next, more turnkey-ready home. Complete all necessary repairs before listing.
  • Prep for a marathon, not a sprint. A 60-day median time on the market means your home could be listed for two to three months before an offer comes along. This isn’t a sign of failure; it’s the new normal. Plan for it upfront.

Big Variable: The 2026 Mortgage Rate Forecast

The entire housing market (in Houston and elsewhere across the U.S.) could be heavily influenced by mortgage rate movements in 2026.

After a volatile period of high rates in 2024 and 2025, the consensus forecast points toward a gradual easing in 2026. This is based on projections that the Federal Reserve will have successfully curbed inflation and will begin cutting its baseline rate.

Analysts from Fannie Mae and other groups project that the 30-year fixed mortgage rates could decline steadily through 2026.

For a buyer purchasing a median-priced Houston home (for around $335,000), a rate drop from 6.5% to 5.9% could save them over $120 per month, adding thousands of dollars to their total purchasing power.

A drop in rates will also begin to “unlock” sellers who have been clinging to their 3% – 4% mortgage rates from the pandemic era. As the gap narrows between their old rate and a new one, more homeowners will be willing to move, bringing more inventory to the market.

Both of these trends could accelerate the Houston housing market in 2026, even if the effects are mild.

Updated Look at the Houston Rental Market

The rental market is the “shadow” of the for-sale market. The two are deeply connected. People who are priced out of buying must rent, and rising rents can push tenants to become buyers.

In late 2025, the Houston multifamily (apartment) market is stabilizing after a boom in new construction.

Here’s what this might mean for the housing market in 2026:

  • Slowing Construction: Due to high financing costs, new apartment construction starts slowed significantly in 2025. This means fewer new units will be delivered in 2026, allowing demand to catch up with supply.
  • Rising Rents: While rent growth was moderate in 2025, the slowdown in new supply is expected to cause rents to accelerate again in 2026. Average rents in the metro are already up ~4-5% year-over-year.
  • Deciding to Buy: Rising rents in 2026 could make homeownership more appealing. A renter paying $2,200/month for a rental may see that a mortgage payment on a $335,000 home (especially with a 5.9% rate) is a very attractive alternative. This could add a new, motivated wave of first-time buyers to the market.

If mortgage rates decline further in 2026, as they’re expected to do, it could make the idea of homeownership even more appealing.

Sign Up for Texas Housing Weekly

You’re now caught up on Houston real estate market trends and forecasts for 2026.

But the market changes constantly—so you have to stay up to speed.

That’s where Texas Housing Weekly comes into the picture.

Sign up for Texas Housing Weekly

We constantly monitor real estate trends across the Lone Star State, analyze them to connect the dots, and deliver the findings to our subscribers every Thursday.

We also monitor and report on housing conditions at the local level, including major metros like Austin, DFW, Houston, and San Antonio.

Sign up to have exclusive insights sent to your inbox every Thursday!

Disclaimer: This report includes Houston housing market predictions, price projections, and other forward-looking views. Those views represent an educated guess and are not guaranteed. The Home Buying Institute (HBI) makes no claims about future real estate trends.