Editor’s Note: This forecast was originally published in 2024 but has been updated to reflect current market conditions in Texas, with a home price forecast for 2027.
Texas home prices have been falling over the past year, and they might have further to fall. We expect prices in most Texas housing markets to remain flat in 2027.
Five key takeaways from this report:
- Statewide, Texas home prices dropped by about 1.4% over the past year, with most major cities posting a modest decline.
- El Paso is the one exception. Prices in that city rose 2.6% over the past year, because there are fewer homes for sale.
- We expect Texas home prices to stay mostly flat in 2027, with only a modest fluctuation one way or the other.
- Three factors are contributing to this trend: high housing costs, lots of new construction, and consumer pessimism.
- But even after falling from the 2022 peak, Texas’s average home price is still about $75,000 higher than pre-pandemic.
Keep up with the market: Our weekly newsletter delivers expert analysis and insights straight to your inbox, every Thursday afternoon.
Texas Home Prices Declined Over the Past Year
In most Texas cities, home prices have declined slightly over the past year. According to Zillow, the statewide average home price declined by 1.4%.
Higher housing costs, buyer hesitancy, and inventory surpluses are the main factors putting downward pressure on home prices across Texas.
This table: The average home price for Texas and its most populous cities, and how they’ve changed over the past year. Source: Zillow HVI.
| City | Average Price (Fall 2026) | Price Change YoY |
| Texas (Statewide) | $296,424 | -1.4% |
| Houston, TX | $259,465 | -2.1% |
| San Antonio, TX | $244,623 | -2.2% |
| Dallas, TX | $303,442 | -1.4% |
| Austin, TX | $491,960 | -3.2% |
| Fort Worth, TX | $292,949 | -1.6% |
| El Paso, TX | $237,556 | +2.6% |
| Arlington, TX | $306,472 | -0.5% |
As you can see, home prices are down across most of Texas, with the El Paso housing market bucking the trend.
El Paso Bucked the Trend With Rising Prices
El Paso stands out as the only major city or metro area in Texas with a year-over-year increase in home prices.
House values have been trending downward just about everywhere else in the Lone Star State.
Shrinking supply is the main reason for this anomaly.
According to a September 2026 report from Realtor.com:
“If you’re shopping in El Paso, you have fewer homes to choose from than buyers did a year ago. Active listings fell 16.6% year-over-year—a sharp contrast to the national market, where inventory actually grew 3.6% over the same period.”
The authors added that El Paso “bucked the national trend” for prices as well, posting a 4% year-over-year increase in its median list price, even as the nationwide median declined by 1.3%.
But for the rest of Texas, home prices have been mostly flat or down slightly in 2026.
Outlook for 2027: Prices Remaining Mostly Flat
Given current economic and housing market trends, the most likely forecast is that Texas home prices will remain mostly flat during 2027.
Long-range price predictions are hard to make in the best times—and even harder during periods of international conflict, inflation, and consumer pessimism.
But we can use current and historical market trends to make an educated guess.
Here are some “best guess” forecasts for Texas home prices in 2027:
- Bullish: Median home price up by 0.5% – 1%.
- Bearish: Median home price down by 1% – 1.5%.
- Realistic: Home prices essentially flat during 2027.
As always, however, it mostly comes down to supply and demand.
In much of Texas, there are plenty of homes for sale but not enough buyers to absorb them all. And that’s putting downward pressure on prices.
Factors Putting Downward Pressure on Prices
Home values rarely rise or fall just because of one factor. It’s usually a combination of things.
In Texas, several overlapping factors are putting downward pressure on prices:
1. Higher housing costs have reduced demand.
Texas home prices have been falling over the past year. But if we expand the timeline to cover the past six years, prices have actually risen substantially.
Here’s how the average Texas home price has changed, according to Zillow:
- $220,737 at the start of 2020
- $315,707 in August 2022 (all-time record high)
- $296,424 in September of 2026
So even though the average price has declined since reaching that 2022 peak, it’s still roughly $75,000 higher than pre-pandemic levels.
Meanwhile, mortgage rates recently rose to their highest level since November of 2023, and some experts believe they’ll hover above 7% throughout 2027 as well.
In Texas, higher housing costs have pushed some would-be buyers out of the market entirely, reducing demand and keeping a lid on home prices.
2. Sellers have a lot of competition, including new homes.
Over the past few years, Texas has led the nation for new home construction, based on building permit data collected by the Census Bureau.
This affects the housing market in several ways.
For one thing, it has forced homeowners who are selling to compete with a lot of brand-new homes that often come with added perks like builder incentives.
Steady construction also reduces the sense of urgency among home buyers, who generally don’t have to worry about overheated bidding wars.
As a result, a lot of Texas homeowners have had to reduce their asking prices just to attract buyers. All of this puts downward pressure on home prices.
3. Pessimism and uncertainty have also cooled the market.
The University of Michigan’s latest consumer survey showed that many Americans have a negative outlook about the current state of the economy.
According to their October 2026 report:
“Frustration over cost-of-living continues to mount, as consumers across the political spectrum believe that the trajectory of the economy has weakened since the beginning of the year.”
Additionally, a report from the Joint Center for Housing Studies found that consumer confidence has dropped since the start of the U.S. war with Iran.
A lot of people also think it’s a bad time to buy a home, an outlook that has persisted for some time now.
All of this is weighing on home prices, in Texas and nationwide.
Disclaimer: This report includes forecasts issued by third parties not associated with the publisher. The Home Buying Institute (HBI) makes no claims about future home prices or other real estate-related trends.