Texas Housing Market in May 2026: What the Statewide Data Shows Buyers

I work with buyers across Texas, and the question I have been hearing most in 2026 is some version of: has the market finally shifted in my favor? Based on the Texas Real Estate Research Center’s May 2026 Housing Insight report and current rate data, the honest answer for most Texas metros is yes. Here is what the numbers actually show, and what they mean for buyers in Austin, Dallas, Houston, and San Antonio.

The Statewide Picture: Prices, Inventory, and Days on Market

The Texas statewide median sale price was $341,800 in March 2026, down 1.8% year over year (Texas Real Estate Research Center, Texas Housing Insight May 2026). Inventory has nearly doubled from the 2021-2022 lows across the state, and homes are sitting longer before going pending.

Key statewide indicators for 2026:

• Statewide median price: $341,800 (March 2026, down 1.8% YoY)
• Inventory trend: Sharply higher than pandemic-era lows statewide
• Price cuts: Widespread across major metros, particularly Austin
• 30-year fixed rate (Texas): approximately 6.46% as of May 29, 2026 (Bankrate survey; rates are illustrative only, not a commitment, and change daily)

The combination of more supply and steady-to-elevated mortgage rates has put sellers in a position they have not occupied since before the pandemic: competing with each other rather than watching buyers compete for their listings.

What Is Happening Metro by Metro

Austin leads Texas in price correction. The Austin-Area MLS reported a median sold price of $460,000 as of late May 2026, down approximately 16% from the 2022 peak. Average days on market are now 54, and more than half of active listings have undergone at least one price reduction. Inventory sits at 5.9 months, right at the edge of buyer’s-market territory. Forecasts from multiple data providers point to a further modest decline of 1% to 1.5% by mid-2026 before the market stabilizes (various sources including NoradaRealEstate and Austin-area MLS data).

Dallas-Fort Worth has seen more moderate softening. The DFW metro remains one of the strongest job markets in the country, which supports prices from the demand side even as supply has grown. Inventory is up, but the market has not corrected as sharply as Austin. Buyers in DFW are finding more selection and longer negotiating windows than they saw in 2021 and 2022, but are less likely to extract the deep concessions available in Austin.

Houston continues to run at lower price points than Austin or DFW, with a more diverse economy that helps stabilize demand. The energy sector recovery has supported employment, which in turn supports housing. Houston inventory is elevated but not as dramatically as Austin’s, and the market tends to absorb corrections more gradually given its sheer size and geographic spread.

San Antonio remains the most affordable of the major Texas metros and has not seen the same price volatility as Austin. Its large military employment base provides a stabilizing demand floor. Inventory is up, but prices have held more steadily, and VA loan activity continues to support a healthy transaction pace.

Smaller metros: McAllen in the Rio Grande Valley is expected to see modest price growth through mid-2026, and El Paso shows similar stability. Markets outside the major growth corridors have generally been more insulated from the correction because they did not experience the same speculative run-up in 2021 and 2022.

What Rising Inventory Means for Your Mortgage Strategy

More inventory affects buyers in several practical ways that go beyond just having more homes to choose from:

Seller concessions are back. In markets with 4-plus months of supply, sellers are routinely accepting requests for closing cost credits (2% to 3% of purchase price is common), rate buydowns funded by the seller, repair credits after inspection, and longer option periods. If you haven’t asked for concessions because you assumed sellers wouldn’t accept them, revisit that assumption. In many Texas markets right now, the ask is reasonable.

Longer inspection and option periods. The standard 5 to 7 day option period that was common during the competitive years has stretched back to 10 to 14 days in many transactions. That extra time lets you complete a thorough inspection, get repair estimates, and make a fully informed decision. Use it.

Pre-approval positioning. In a more balanced market, your pre-approval letter still matters significantly. Sellers evaluating multiple offers weight certainty of close alongside price. A clean pre-approval from a licensed loan officer, showing verified income and assets, with a realistic qualification figure, carries more weight than a fast online pre-qual that wasn’t fully documented.

For buyers considering an FHA loan, understanding the loan limits and mortgage insurance structure is important before you start making offers. See my full breakdown in the FHA loans in Texas guide. For conventional buyers, see the comparison of 3%, 5%, 10%, and 20% down paths in the conventional loans in Texas guide.

What Softening Prices Mean for Your Mortgage

A lower purchase price has a compounding positive effect on your mortgage:

• The loan amount drops, which reduces monthly P&I payment directly
• A smaller loan reduces the absolute cost of PMI (on conventional loans), making the insurance line on your payment smaller
• A lower purchase price may move you below a loan-to-value threshold that unlocks better pricing (for example, below 80% LTV if you have enough down payment)
• Seller concessions toward closing costs reduce how much cash you need at the table, even if the purchase price stays the same

The mathematics of a price decline are more favorable when combined with seller concessions than when viewed in isolation. A $20,000 price reduction on a $400,000 home reduces your monthly payment by approximately $120 per month at 6.50%. That same $20,000 applied as a seller-paid rate buydown could reduce your rate by roughly 0.5 percentage points for the life of the loan, which may save more depending on how long you stay in the home.

Buyers who have been sitting on the sidelines waiting for rates to fall significantly should weigh that approach against what the current market is offering in concessions and price adjustments. If rates do fall in the second half of 2026, refinancing is always an option. Buying now when inventory is high and sellers are motivated locks in today’s pricing advantage, and a refinance later captures any rate improvement. There is no guarantee rates will fall, and there is no guarantee the current inventory surplus will persist through 2027. Subject to credit, income, and property qualifications.

Once you own, reducing your mortgage insurance when you reach 20% equity is one of the most immediate ways to lower your monthly payment. For how that works, see my guide on removing PMI: the three paths for Texas homeowners.

Where Texas Property Taxes Fit Into This Picture

Lower sale prices do not reduce your property tax rate, but they do reduce the absolute dollar amount your taxes are calculated on. In a market where prices have softened, both your purchase price and your assessed value may be lower than they would have been in 2022, which gives you some double benefit: lower P&I and lower property taxes.

Texas property tax rates vary significantly by county and school district, as I cover in detail in my Texas property taxes by county comparison. If you are deciding between two metros, the tax rate difference can swing your monthly payment by $200 to $400 per month on the same purchase price. That is a number worth understanding before you commit to a location.

Frequently Asked Questions

Is Texas still a buyer’s market in May 2026?

In most Texas metros, yes. Inventory has nearly doubled from pandemic-era lows, sellers are accepting concessions that were unheard of in 2021 and 2022, and the statewide median price declined 1.8% year over year through March 2026 (Texas Real Estate Research Center). Austin is deepest into buyer’s-market territory, with 5.9 months of supply. DFW and Houston are more balanced but also more negotiable than they were 18 to 24 months ago.

What is the Texas statewide median home price in 2026?

The statewide median sale price was $341,800 in March 2026, down 1.8% from the same period a year earlier, according to the Texas Real Estate Research Center’s May 2026 Housing Insight report. That figure includes all property types and all Texas markets, so it blends high-cost metros like Austin with more affordable markets like Lubbock, Amarillo, and the Rio Grande Valley.

What mortgage rate can I expect in Texas right now?

As of May 29, 2026, the average 30-year fixed mortgage rate in Texas was approximately 6.46% per a Bankrate survey of large lenders. Rates vary by lender, borrower profile (credit score, down payment, DTI), and loan type. These figures are illustrative and not a rate quote. Your actual rate depends on your specific file. Rates change daily and should be confirmed with your loan officer at the time of your application.

Should I buy now or wait for rates to drop in Texas?

There is no guaranteed answer, because rate forecasts are not reliable at a 6 to 12 month horizon. What the current Texas market does offer is more inventory, more seller negotiability, and lower prices than 2022. If you buy now at a rate of 6.50% and rates fall to 5.75% in 18 months, refinancing captures that improvement. Waiting means betting that the current buyer-favorable market conditions hold until rates fall, which is not guaranteed. Talk through your specific numbers with a loan officer before deciding.

Which Texas metro is most affordable for buyers in 2026?

Among the five largest metros, San Antonio consistently posts the lowest median home prices, typically $255,000 to $290,000 in 2026. Houston is the next most affordable at roughly $310,000 to $340,000 median. DFW runs $380,000 to $420,000 and Austin approximately $440,000 to $460,000. Smaller metros like Lubbock, Amarillo, and McAllen offer significantly lower prices but may have fewer employment opportunities depending on your industry.

What seller concessions can I realistically ask for in Texas right now?

In most Texas markets with 4-plus months of inventory, buyers are successfully requesting closing cost credits of 2% to 3% of purchase price, seller-funded rate buydowns, repair credits after inspection, and longer option periods of 10 to 14 days. The exact concessions you can negotiate depend on days on market, how many other offers are on the table, and how motivated the seller is. A listing that has been on market for 60-plus days is typically more flexible than one that just listed.

If you are ready to take advantage of what this market is offering and want to walk through your options before you start making offers, reach out directly at anthonyferrando.com/contact. We will look at your specific numbers, credit profile, and target metro and map out the best loan structure for your situation.

Anthony Ferrando | Mortgage Loan Originator | NMLS# 1919613 | Ferrando Financial LLC NMLS# 2403080 | Licensed in Texas. This is not a commitment to lend. Loan approval is subject to credit, income, and property qualifications. The 30-year fixed rate cited (6.46%) is from a Bankrate survey of large lenders as of May 29, 2026; it is illustrative only and not a rate quote. Rates change daily and vary by borrower profile. Rate predictions and forecasts are speculative and not guaranteed; do not make financial decisions based solely on rate forecasts. Equal Housing Lender. Sources: Texas Real Estate Research Center, Texas Housing Insight May 2026; Bankrate Texas Mortgage Rates (May 29, 2026); Austin-Area MLS via Team Price Market Report (May 27, 2026); NoradaRealEstate.com.