Ed Neuhaus 
I was sitting in my truck last week scrolling through new MLS alerts and something hit me. There were 47 new listings in a single day across Travis County. Not spread across a week. A single day. And I thought back to 2021 when I would literally refresh the MLS at 6am hoping to find something, ANYTHING, for my buyers before another agent snagged it by lunch.
Those days are gone. And honestly? Good riddance.
The Numbers Tell The Story
So lets talk about what’s actually happening in the Austin housing market in 2026. As of late February, there are over 13,400 active residential listings across the Austin metro area. That Activity Index is sitting at about 23%, meaning roughly one in four listings has a pending contract on it.
For context, during the pandemic madness of 2020 and 2021, Austin had fewer than 4,000 active listings. We were running on fumes. Inventory was at 0.4 months (that’s not a typo, less than two weeks of supply). Buyers were writing love letters to sellers, waiving inspections, offering $100,000 over asking, and still losing out.
Now we’re at 4.7 months of inventory. That’s over 335% more homes on the market than the pandemic low. And the median sold price has come back to earth at $430,000, down about 22% from the May 2022 peak when things were absolutely unhinged.
Not bad right? Well, depends on which side of the transaction you’re sitting on.
Why The Freeze Is Finally Thawing
Ok here’s the thing everyone’s been talking about for three years. The “lock-in effect.” If you bought a house between 2020 and 2022, you probably locked in a rate somewhere between 2.5% and 3.5%. Maybe lower. And the math on giving that up to buy at 7% was just brutal. So people stayed put. Even when they outgrew the house, even when they got a job offer in another city, even when the marriage fell apart. They stayed because the math said stay.
But here’s what’s changed.
First, mortgage rates just dipped below 6% for the first time since September 2022. The 30-year fixed hit 5.98% as of late February. That’s still not 3%, obviously. But it’s a whole different conversation than 7.5%.
Second (and this is the part most people miss), there are now more homeowners with mortgages ABOVE 6% than below 3%. That’s a tipping point. The narrative used to be “everyone has a cheap mortgage.” That’s becoming less true every month as people buy, refinance, or take out new loans at current rates.
And third, life happens. I’ve seen this firsthand over 19 years in this market. You can have a 2.8% rate and still need to sell because the kids need a bigger house, or the commute to the new Samsung campus is killing you, or the divorce papers got signed. Benjamin Graham wrote that “in the short run, the market is a voting machine but in the long run, it is a weighing machine.” Same thing applies here. In the short run people vote to keep their low rate. In the long run, life weighs more.
What This Means If You’re Thinking About Selling
Here’s where I’m going to be honest with you, because that’s kind of my thing.
If you’ve been sitting on the sidelines waiting for the market to go back to 2022 pricing, I need you to hear this: that market is not coming back. Not in 2026, probably not in 2027. The median sold price in Austin right now is $430,000. The peak was around $550,000. That gap has been absorbed by the market and priced in.
But here’s what IS working in your favor if you’re a seller right now.
Buyers are actually showing up again. Pending sales in Travis County grew 11.1% year over year in January. Rates touching the 5s has brought people off the sidelines. I wrote about this in my January market analysis and the trend has only accelerated since then.
You have leverage that sellers in 2024 didn’t. The sold-to-list ratio is 96.87%. That means homes are selling within about 3% of asking. If you price correctly (and I can not stress that enough), you’re going to get pretty close to what you’re asking.
The rate math works now. If you’re moving from a 3% rate to a 6% rate, yeah that stings. But if you’re downsizing and pulling out equity? The payment might actually be similar or less. If you’re buying a bigger house, the payment goes up, but you’re also building equity in a market that’s much closer to fair value than it was in 2022. I would argue the risk of overpaying is dramatically lower today than it was three years ago.
And look. Nearly half the listings on the market right now have had a price reduction. 48% to be exact. That tells me a lot of sellers are still overpricing and then having to come down. If you want to be the one who sells in 30 days instead of 90, price it right from day one. I know that’s not what you want to hear but it’s the truth.
What This Means If You’re A Buyer
Ok buyers, your turn. And honestly this section is more fun to write because the market hasn’t been this buyer-friendly since probably 2018 or 2019.
You’ve got options right now. Real options. Over 13,000 of them across the Austin metro. Properties are sitting on the market for an average of 90 days, which means you have time to think, negotiate, and actually do your due diligence without someone breathing down your neck with a competing offer.
Here’s what I’m telling my buyers right now:
Negotiate everything. Closing costs, repairs, rate buydowns, home warranties. In 2021 buyers were lucky to get the seller to leave the refrigerator. Now? I’m regularly getting $10,000 to $15,000 in seller concessions (sometimes more) on deals I’m closing. That’s real money that can go toward closing costs or buying down your rate.
Don’t wait for 4% rates. I see this all the time. Buyers who say “I’ll buy when rates hit 4%.” Here’s the problem with that logic right. If rates drop to 4%, every sidelined buyer in America floods back into the market simultaneously. Prices spike. Competition returns. You lose all the negotiating power you have today. The whole thing that makes NOW a good time to buy is that most people are still scared to buy.
New construction is your friend. Austin got absolutely flooded with new builds in 2024 and 2025. Builders are sitting on inventory and they are motivated. I’m seeing builder incentives that would have been unthinkable three years ago. Rate buydowns, design center credits, closing cost coverage. If you haven’t looked at new construction lately, you should. Check what’s available in Bee Cave, Lakeway, and Dripping Springs where builders have been especially aggressive.
If you’re a first-time buyer, this is genuinely the best market you’ve had in years. Prices are 22% below the peak. Rates are at a 4-year low. Sellers are negotiating. Down payment assistance programs are still active. I’m not being salesy here, I’m just reading the data.
The Investor Angle (Because I Know You’re Wondering)
I’d be lying if I said I wasn’t looking at the market through an investor lens too. I own STR properties, I analyze deals constantly, and what I’m seeing right now is interesting.
A bunch of speculative investors who bought at the peak are exiting. Negative cash flow, declining values, regulatory headaches. They’re selling at a loss in some cases. And that’s creating buying opportunities for people who actually know how to run the numbers conservatively.
Howard Marks has this line about how “you can’t buy bargains from happy sellers.” Well, there are some unhappy sellers out there right now. Not to be morbid about it, but if you’ve been waiting to pick up a rental property in Austin at a price that actually cash flows, 2026 is looking better than anything I’ve seen since about 2019.
The key is running the numbers honestly. Use current rents not projected rents, budget 8% for vacancy just to be safe, and make sure the deal works at 6% rates because rates might stay here a while. Fannie Mae is forecasting rates around 6% through 2027.
Where I Think This Goes From Here
Lets be real for a second. I don’t have a crystal ball (if I did I would have bought Bitcoin in 2010 and you’d be reading this from my yacht). But here’s what the data is telling me.
Inventory is going to keep climbing through spring. That’s seasonal, that’s the lock-in thawing, and that’s builders still delivering units. I wouldn’t be surprised to see 15,000 or 16,000 active listings by May.
Prices are going to stay flat to slightly up. The $430,000 median is pretty well supported right now. Demand is increasing (pending sales up 11%), and population growth in Austin isn’t slowing down. But the days of 20% annual appreciation are over, and I think we all knew that.
Rates will probably bounce around the 5.9% to 6.3% range through spring. Could tick lower if economic data weakens, could tick higher if inflation gets stubborn again. Either way, we’re in a much better rate environment than we’ve been in since 2022.
The sellers who do well in this market are going to be the ones who price honestly, present their homes well, and work with someone who knows how to market a property (not just throw it on the MLS and pray). If you’ve been debating whether to sell now or wait, the data suggests that the buyer pool is actually growing right now. Waiting another year means competing with even more inventory.
Frequently Asked Questions
The Bottom Line
The great housing freeze is thawing. It’s not a flood (yet), but the ice is cracking and the data is clear. More sellers are coming to market, buyers have real negotiating power for the first time in years, and the rate environment is the best it’s been since late 2022.
Whether you’re buying, selling, or just trying to figure out what your house is worth in this market, I’m always happy to walk through the numbers with you. No pitch, just data. That’s kind of how I operate.
Lets talk. And until next time, be safe, be good, and be nice to people.
