Austin Housing Market Forecast 2026-2027: Prices, Inventory, and What to Expect

If you’ve been watching Austin’s housing market over the past few years, you’ve probably noticed something: it got really quiet. The bidding wars are gone. The 10-day closings are gone. And sellers who listed at peak 2022 prices are sitting. And sitting.

So the question everyone keeps asking me is: when does it turn around?

I’ve been selling homes in Austin for over 16 years, and I’ll give you the honest answer. The Austin housing market forecast for 2026-2027 shows a market that’s still correcting in the first half of this year, with most analysts projecting a bottom by mid-2026 and modest recovery starting in 2027. But the part nobody’s talking about is this: the timing of the bottom matters way less than what you DO between now and then.

Lets break it all down.

Where Austin’s Housing Market Stands Right Now

Here are the numbers as of early 2026:

• Median home price: ,000 (down about 20% from the ,000 peak in May 2022)
• Days on market: 88 days (the highest since March 2011)
• Active listings: 10,372 across the metro
• Months of inventory: 4.2 (balanced is typically 4-6 months)
• Price cuts: Over 53% of listings took a price reduction in late 2025

That last number is the one that gets me. More than half of sellers are cutting their price. That tells you everything about where the power sits right now. It’s with buyers.

And if you’re wondering how Austin compares nationally? We’re one of the slowest major housing markets in the country right now. Homes here take about 88 days to sell. During the 2021 frenzy, that number was 10-15 days.

How We Got Here: The Correction in Context

It helps to understand the timeline. Because if you just look at today’s numbers without context, it can feel alarming. But when you zoom out, this correction makes perfect sense.

2020-2022: The frenzy. COVID brought remote workers to Austin by the tens of thousands. Prices jumped 50%+ in some neighborhoods. Buyers waived inspections, offered $100K over asking, and still lost. It was completely unsustainable.

2023: Rate shock. The Fed raised rates from near zero to over 7%. Buyers who could afford $600K at 3% could now afford $450K at 7%. Demand dropped off a cliff.

2024-2025: The slow bleed. Prices drifted lower. Inventory built up. Sellers who didn’t need to sell pulled their listings. Those who did sell learned to price aggressively. The market entered a correction that felt less like a crash and more like a long exhale.

2026: Still correcting, but the data is shifting. Median prices have mostly stabilized in the $430K-$440K range. Mortgage rates have eased to about 6.1%. And while inventory is elevated, it’s not spiraling. We’re getting close to a floor.

Austin Housing Market Forecast: When Does the Bottom Arrive?

This is the question I get asked more than any other. And the honest answer is: probably mid-2026.

Here’s what the data points to:

• The Texas Real Estate Research Center at Texas A&M forecasts continued price softening through the first half of 2026, with mortgage rates being the key variable that shapes everything else
• Multiple local market analysts project the bottom arriving in Q2-Q3 2026
• Some submarkets could see an additional 3-5% decline before stabilizing
• By late 2026, most forecasters expect prices to flatten out as buyer confidence improves

But here’s what I want you to understand: “the bottom” is only obvious in hindsight. Nobody rings a bell. By the time you’re sure prices have bottomed, you’ve already missed the best buying conditions because other buyers figured it out at the same time.

I’ve seen this pattern before. In 2011-2012, Austin was coming out of the last downturn. The buyers who purchased in 2011 (when it still felt scary) did far better than the ones who waited until 2013 (when it felt safe). By 2013, competition was back and prices were climbing.

What 2027 Looks Like

Most forecasters are projecting modest price appreciation starting in 2027. Not the double-digit insanity of 2021. Something more like 2-4% annually.

That’s actually healthy. Sustainable. The kind of growth you can plan around.

And the long-term fundamentals for Austin haven’t changed:

• Population growth: The Austin metro is projected to reach 5.2 million by 2060 (currently about 2.5 million). That’s a lot of future housing demand.
• Job market: Unemployment sits around 3.4% with 1.6% employment growth expected in 2026. The tech layoffs made headlines, but Austin’s economy is more diversified than people realize.
• No state income tax: Texas continues to attract relocators from California, New York, and the Midwest. That migration hasn’t stopped.
• Infrastructure investment: I-35 Capital Express, Project Connect transit, Austin-Bergstrom expansion. These projects signal long-term growth.

The people who say “Austin is over” are looking at a three-year correction and calling it a permanent trend. The demographic and economic fundamentals say otherwise.

What This Means If You’re Buying

Ok, this is the section where I get on my soapbox for a minute.

If you’re a buyer right now, you’re in the best negotiating position Austin has offered in over a decade. And I don’t just mean on price.

Think about the contract terms you can negotiate today:

• Seller concessions: Sellers are contributing $5,000-$15,000+ toward closing costs and rate buydowns. That was unheard of in 2021.
• Full inspection periods: No more waiving inspections to win a bidding war. You get time to do your due diligence.
• Price negotiations: With 53% of listings already cutting prices, there’s room to negotiate further.
• Time to think: 88 days on market means you can sleep on it. Make an informed decision. Not a panicked one.

I wrote about this in detail in my article on whether 2026 is the best time to buy in Austin. The short version: the terms you can negotiate now are arguably more valuable than whatever additional price decline you might get by waiting another six months.

And don’t forget the 2026 Texas homestead exemption increase. Your exemption just jumped to $140,000 (and $200,000 if you’re over 65). That’s real money off your property tax bill every year you own the home.

What This Means If You’re Selling

I’m not going to sugarcoat this. Selling in Austin right now requires a different mindset than what worked in 2021.

The days of listing high and waiting for a bidding war are over. Here’s the reality:

• Pricing is everything. Homes priced right (based on actual recent comps, not what your neighbor sold for in 2022) are still selling. Homes priced 10% above market are sitting for months.
• 53% of sellers are cutting prices. If you start too high, you’ll end up chasing the market down. Better to price competitively from day one.
• Presentation matters more. In a bidding war, buyers overlook cosmetic issues. In a buyer’s market, that outdated kitchen actually costs you. Staging, repairs, and curb appeal make a measurable difference right now.
• Be patient. 88 days on market is the average. If your home is well-priced and well-presented, you can beat that. But it won’t sell in a weekend.

The good news? Motivated buyers are still out there. Austin’s job market is strong and migration from other states continues. The buyers just have more options now, so your home needs to stand out.

What This Means If You’re Investing

For investors, the Austin housing market forecast for 2026-2027 is actually kind of interesting.

The math is getting better. Lower purchase prices mean better cash-on-cash returns. Seller concessions and rate buydowns improve your financing. And with rents holding relatively steady while prices have dropped 20%, the rent-to-price ratio has improved significantly.

Austin’s long-term investment thesis hasn’t changed:

• Strong population growth (more future tenants)
• Diversified economy (not dependent on one employer)
• No state income tax (attracts relocators who become renters or buyers)
• Limited land constraints in the urban core

The smart money buys when everyone else is scared. That’s the tortoise approach. You don’t need to time the exact bottom. You need to buy at a price where the cash flow works and hold long enough for appreciation to do its thing.

The Neighborhoods I’m Watching

Not every part of Austin is going to recover at the same pace. Here are the Hill Country areas I’m watching most closely heading into the back half of 2026:

Bee Cave

Bee Cave has one of the lowest city tax rates in the area ($0.02 per $100). The Hill Country Galleria gives it a walkable retail center, and proximity to both Lake Travis ISD and Eanes ISD schools makes it attractive to families. Price corrections here have been moderate compared to some outer suburbs.

Lakeway

Lakeway appeals to buyers who want lake access and a resort-town feel without going an hour outside Austin. Median prices in the mid-$700s offer relative value compared to Westlake. I expect Lakeway to be one of the first Hill Country communities to see prices stabilize.

Dripping Springs

Dripping Springs has been hit harder by the correction because much of its inventory is new construction. Builders are offering aggressive incentives ($10K-$30K in some communities). If you’re open to new builds, this is where some of the best deals are right now.

Westlake

The luxury segment has its own dynamics. Westlake homes above $1.5M take longer to sell in any market, but the combination of Eanes ISD schools and central location keeps demand more resilient than most luxury submarkets.

The Bottom Line

The Austin housing market forecast for 2026-2027 comes down to this: we’re near the bottom of a multi-year correction, with most analysts projecting stabilization by late 2026 and modest recovery in 2027.

This isn’t a crash. It’s a normalization. Austin prices are returning to something sustainable after an unsustainable run-up during COVID.

If you’re waiting for the perfect moment to buy, you’ll probably miss it. The market doesn’t announce the bottom with a press release. By the time it’s obvious, competition is back and the deals are gone.

If you’re selling, price it right. Present it well. Be patient.

And if you’re investing, the numbers are starting to work again in ways they haven’t for years.

At Neuhaus Realty Group, we track this data obsessively because our clients deserve to make decisions based on what’s actually happening, not what the headlines say. The Austin market is shifting. And the people who understand the shift are the ones who come out ahead.

We’ll update this forecast quarterly as new data comes in. Bookmark this page or reach out to Ed Neuhaus directly if you want to talk through what these numbers mean for your specific situation.