Austin Housing Market Forecast 2026: What Buyers and Sellers Need to Know

If you’ve been watching the Austin housing market and wondering what 2026 has in store, you’re not alone. I get this question more than any other right now. And the honest answer is more nuanced than the headlines make it sound.

The Austin housing market forecast for 2026 is not a simple “up” or “down” story. It’s a market in transition. Prices are still softening in some areas, inventory is at levels we haven’t seen in over a decade, and buyers have more leverage than at any point since 2019. But this is not a crash. This is a correction from the 2021-2022 frenzy, and if you understand what’s actually happening, there are real opportunities on both sides of the transaction.

I’ve been working this market for over 15 years, and I’ll tell you what I tell my clients: the data matters more than the narrative. So lets walk through what’s actually happening, what every major forecaster is predicting, and what I think is really going on with mortgage rates (because most people get that part completely wrong).

Note: I’m committed to updating this page monthly with fresh data as the market evolves throughout 2026. Bookmark it and check back.

Where the Austin Market Stands Right Now

Here’s the current snapshot for the Austin metro area. These are real numbers, not spin.

So what does this tell us? A few things.

First, 88 days on market is the highest Austin has seen since 2011. That’s not normal for this city. Over half of all listings are cutting their price. And the close-to-list ratio of 90.9% means sellers are closing deals at roughly 9% below their asking price on average.

Second, Austin has a 114% gap between sellers and buyers. That’s the widest gap in the entire country. More sellers than buyers in every price tier. This is a buyer’s market by any definition.

But here’s the thing. Homes are still selling. Nearly 30,000 closed in 2025. The market isn’t dead, it’s just slower. And slower is actually healthy after what we went through in 2021-2022.

What Every Major Forecaster Is Saying About Austin in 2026

I track about a dozen different forecast sources because no single one gets it right every time. Here’s where they all land for Austin in 2026:

The consensus: Austin prices decline another 1-3% in the first half of 2026, then flatten out or begin to stabilize in Q3-Q4. Nobody credible is calling for a crash. And nobody credible is calling for a boom. It’s a correction that’s playing out exactly like corrections play out.

Now, here’s where I think most of these forecasters miss the mark. They treat “Austin” as one market. It’s not. A $3.5 million home in Westlake Hills and a $650,000 home in Dripping Springs are in completely different markets with completely different dynamics. I’ll get into that below.

The Mortgage Rate Thing Most People Get Wrong

Ok, this is the part where I need to get something off my chest. Because I hear it from clients, I hear it from other agents, I hear it on the news, and it drives me crazy.

The Fed funds rate is not the mortgage rate. They do not directly affect each other. I know that sounds wrong because every time the Fed makes an announcement, the headlines say “what this means for your mortgage.” But the reality is mortgage rates track the 10-year Treasury yield, not the Fed rate.

And here’s the proof. In September 2024, the Fed cut rates. You know what mortgage rates did? They went UP. By over 70 basis points. Rates went from 6.09% to 6.84% in the months following the cut. That broke a pattern that had held in every Fed cutting cycle since the 1980s. This was widely covered and caught a lot of people off guard.

So why did that happen? Because when the bond market doesn’t trust that a rate cut is the right move, or when it sees inflation risk ahead, investors demand a higher yield on the 10-year Treasury. And since mortgage rates are pegged to that 10-year yield, rates go up even when the Fed is cutting.

Now lets talk about what I think happens next. The president’s pick for a new Fed chair will likely try to bring the Fed lending rate down. And on the surface, that sounds great for homebuyers. But here’s the risk that nobody on cable news is talking about.

If the Fed cuts too aggressively, it could temporarily lower mortgage rates followed by an increase. Here’s why. If the rest of the world sees the Fed or America as unstable and in a position to run up more inflation (which makes the dollar worth less), foreign investors may not be willing to buy the 10-year Treasury. And the 10-year Treasury has a much larger direct impact on mortgage rates than the Fed funds rate does. If nobody wants the 10-year, yields go up, and mortgage rates follow. So aggressive Fed cuts could paradoxically lead to higher mortgage rates.

I’m not an economist. I’m a Realtor who pays attention to this stuff because it directly affects my clients. And I would argue that anyone buying or selling a home in 2026 needs to understand this dynamic. Waiting for the Fed to “fix” mortgage rates could be a very long wait.

Current mortgage rates sit around 5.99%. Most forecasters expect them somewhere between 5.0% and 5.9% by year-end 2026. But that range depends heavily on what happens with Treasury yields, not what the Fed does. For more on how rates affect your actual buying power, I wrote about this in detail here. And if you want the full argument for why obsessing over Fed cuts is a distraction, this piece breaks it down.

It’s a Buyer’s Market. So What Does That Actually Mean?

When I say “buyer’s market,” I don’t mean prices are falling off a cliff. I mean buyers have leverage they haven’t had in years. And that leverage shows up in very specific ways.

Right now, 53.4% of Austin listings are cutting their prices. Average days on market is 88. The close-to-list ratio is 90.9%, meaning sellers are accepting about 9% less than their asking price. That’s a lot of room to negotiate.

What buyers are getting in this market:

• Closing cost credits (sellers paying part of your closing costs)
• Rate buydowns (sellers paying to lower your interest rate for the first 1-3 years)
• Repair concessions that would’ve been laughed at in 2021
• Flexible closing timelines
• No bidding wars in most price tiers

And if you’re looking at new construction, builders are being even more aggressive. New build buyers averaged 5.27% mortgage rates in Q3 2025 compared to 6.26% for existing home buyers. That’s a full percentage point advantage. Builders are also throwing in closing cost credits, free upgrades, and flex dollars up to 10% of the base price. Is now actually a good time to buy? I think the data says yes.

For sellers, the calculus is different. I wrote a full breakdown in my seller’s guide for 2026, but the short version is: price it right from day one, because the market punishes overpricing faster than at any point in the last decade. Your best showing activity happens in the first 14 days. Miss that window and you’re chasing the market down.

The Key Swing Factors for 2026

Two things will determine whether Austin’s market stabilizes, improves, or continues softening through 2026:

1. Mortgage rates. If rates drop into the mid-5% range, competition increases and absorption picks up. If rates stay above 6% or go higher (see my Treasury yield argument above), the buyer’s market deepens. The difference between 5.5% and 6.5% on a $500K home is roughly $350/month. That matters.

2. Tech hiring confidence. Austin’s tech sector represents 16.3% of all jobs in the metro. But tech employment actually declined 1.6% in 2024, and startups were down 4.9%. Apple, Tesla, Oracle, Meta, and Samsung all have major campuses here, and their hiring plans directly affect housing demand. Austin’s population growth has already slowed from 4% per year (2010-2020) to about 1% per year. The tech sector is a big reason why.

Other factors I’m watching: the I-35 Capital Express project ($5B+, federal approval came in January 2026), Project Connect light rail ($7.1B, groundbreaking 2027), and apartment vacancy rates at 10.01% with rents down 17.44% from their peak. That apartment data matters because it gives renters less incentive to buy, which keeps demand suppressed for entry-level homes.

West Austin: A Market Within a Market

And here’s where things get really interesting. Because West Austin doesn’t behave like the rest of the metro.

I work extensively in the communities west of downtown, from Westlake Hills and Rollingwood to Lakeway, Bee Cave, Barton Creek, and Dripping Springs. And what I can tell you is that the further you get from the core and the lower the price point, the more the correction bites. But the inverse is also true. The premium communities closest to downtown, with the top school districts, are largely insulated from meaningful downside.

Why? Because sellers in Westlake Hills and Rollingwood don’t have to sell. If they don’t get their price, they move to the private market. There’s significant inventory in off-MLS private listings that doesn’t show up in the public numbers. The data you see is not the full picture in the $2M+ space.

But in Lakeway and Dripping Springs, sellers are more likely to need to sell, and the market reflects that. Lakeway has 60% of listings with price cuts. Dripping Springs has the fastest days on market in West Austin (24 days), but that’s because sellers there are pricing aggressively to move.

I’ve broken down each of these communities in detail:

• Westlake Hills and Rollingwood: Austin’s most exclusive market, Eanes ISD (#1 in Texas), $3.5M+ median
• Lake Travis and Lakeway: Lake life, marinas, Travis Club (THE luxury story of 2026), and the 620 commute reality
• Dripping Springs: West Austin’s fastest-growing market, youngest demographics, exploding new construction
• Bee Cave and Barton Creek: Hill Country luxury meets convenience, four championship golf courses, $0.02 city tax rate

And for the data nerds (I say that with love), here’s my neighborhood-by-neighborhood price comparison that breaks down exactly where prices are holding and where they’re softening. Nobody else publishes this data in one place.

If you’re trying to pick the right school district, I compared Eanes ISD vs Lake Travis ISD vs Dripping Springs ISD side by side. And if you’re moving to the area from out of state, my West Austin relocation guide covers everything from no-income-tax math to which neighborhood matches your California zip code.

For buyers interested in new builds, my new construction guide covers every major community, builder incentives, and why new construction is actually outperforming resale right now. And if you’re shopping in the $1M+ range, the luxury market analysis has the data you need.

What I Think Happens Next

I know you are thinking, “ok Ed, just tell me what’s going to happen.” So here’s my take.

Prices continue to soften in early 2026. Probably another 1-3% decline across the metro, with some pockets doing better and some doing worse. The bottom likely hits somewhere in Q3-Q4 2026, then we stabilize.

No crash. This is a correction from a frenzy, not a collapse of fundamentals. Austin still has strong population growth (slower, but positive), massive infrastructure investment, a diversified tech economy, and a quality of life that keeps attracting people.

The window of elevated inventory plus motivated sellers plus improving rates may not stay open forever. If rates drop to the mid-5% range, competition comes back. And when competition comes back, leverage shifts. That’s not a prediction, that’s just how markets work.

Homes will continue to sell everywhere. Just slower. And the buyers who are out there right now, in early 2026, with pre-approvals and realistic expectations? They’re the ones getting the best deals I’ve seen in years.

I’ll update this page monthly as new data comes in. The market is moving, and the only thing worse than bad information is old information.

What’s Changed in Texas Real Estate Law

One more thing. If you’re buying or selling in Texas in 2026, there are some significant new laws that affect your transaction. I wrote a complete guide to the 2026 Texas real estate law changes that covers buyer representation agreements, new TREC forms, and everything else you need to know. It’s worth 10 minutes of your time.

Ready to Talk?

Whether you’re buying, selling, or just trying to figure out what your home is worth in this market, I’m here. No pressure, no pitch. Just an honest conversation about your options based on real data.

Contact Ed Neuhaus at Neuhaus Realty Group for a no-pressure conversation about your Austin real estate goals.

Browse current listings:

• Westlake Hills homes for sale
• Bee Cave homes for sale
• Lakeway homes for sale
• Dripping Springs homes for sale