Disclaimer: The May 2026 figures are based on more complete data and have been revised from their initial release
The Texas housing market showed early signs that the recent market downturn may be beginning to stabilize. While demand remains restrained by affordability challenges, elevated mortgage rates, and broader economic uncertainty, several key market indicators suggest the pace of rebalancing is no longer intensifying. Inventory turnover is holding relatively steady, months of supply is no longer rising for the first time in the current cycle, and statewide home price declines are beginning to moderate, even rising in a major North Texas market.
Statewide housing inventory continued to increase in May, but the broader inventory picture showed signs of leveling off. Active listings remained elevated by historical standards, but the pace of inventory accumulation has slowed considerably. Will this mark the beginning of an important market shift? It is still too soon to tell. For much of the past 12 months, rising inventory signaled a market where supply outweighed limited buyer affordability, and the latest data suggest the market is no longer softening at the same pace seen earlier in the cycle and may be approaching a more balanced footing.
Market conditions remain uneven across major metropolitan areas. Austin and DFW have seen moderate year-over-year (YoY) declines in both active inventory and months of supply, suggesting the inventory overhang in those markets may be easing. While Austin continues to see a more pronounced price correction from the pandemic run-up, the pace is moderating. Meanwhile, Houston and San Antonio continued to experience inventory gains and pricing pressures.
An unexpected pullback in new seller activity in May points to continued market uncertainty and suggests that both buyers and sellers remain cautious. This pullback likely reflects a combination of market uncertainty, affordability constraints affecting buyer demand, and seller hesitation given weak pricing conditions leading to the summer months.
Home prices also show early signs of stabilization. Statewide prices continued to soften through May, marking 12 consecutive months of YoY declines. However, the magnitude of the decline remained modest and is showing signs of moderating.
Overall, the Texas housing market is showing tentative signs of stabilization with the most recent data suggesting the imbalance between supply and demand is no longer worsening. Still, inventory remains elevated, affordability remains challenging, and market uncertainty continues to weigh on both buyers and sellers.
May Sales Activity Mixed
Table 1: May 2026 State & National Sales
- Statewide, Texas recorded 33,661 closed sales in May, up slightly from last year. Performance across the major metros was mixed, with gains in some markets offset by softer activity in others (see Table 3).
- Through May, year-to-date (YTD) home sales were 1.9 percent compared with the same period last year. Among the major metros, Austin continued to lead sales growth, while Dallas posted only modest gains and both Houston and San Antonio experienced slight declines (see Table 3).
- The statewide median sales price reached $340,000, rising modestly from $335,000 in April and remaining largely unchanged from a year ago.
- Nationally, non-seasonally adjusted existing home sales in May increased 0.3 percent YoY. On a YTD basis, sales were 0.8 percent above last year’s pace. Meanwhile, the median price of existing single-family homes climbed to $436,400, a 1.8 percent increase from $428,800 a year earlier.
Monthly Market Snapshot: May Sales and Inventory Trends
Table 2: Texas Housing Market Indicators
- In May, homes spent an average of 64 days on the market (DoM) before selling. Although marketing times remained longer than a year ago, the YoY gap continued to narrow.
- The inventory turnover ratio showed signs of stabilization. For the second consecutive month, the turnover ratio is no longer trailing year-ago levels, suggesting sales activity is keeping pace with the growth in available inventory.
- The median seller price cuts were $12,000, equivalent to 3.4 percent of the initial listing price, in line with levels observed a year earlier.
- Active inventory is at 5.3-month supply. Despite remaining elevated by historical measures, inventory fell slightly below year-ago levels for the first time in the current cycle. The DoM among month-end unsold inventory is 90 days.
Seller Activity Weaker Than Expected
Figure 1: Monthly New-Listing Activity, 2026
Source: Texas Real Estate Research Center analysis of Data Relevance Project, Texas REALTORS® data
- Statewide, new listings declined 4.7 percent from April to May. This MoM decrease contrasts with typical seasonal patterns, as May historically represents the peak period for new listing activity.
- Reflecting this unexpected seasonal softness, new listings were down 6.3 percent YoY. YTD (January through May), new-listing activity is 0.3 percent below the level recorded during the same period last year.
- New-listing activities weakened across major metros (see Table 4), with Austin and San Antonio exhibiting the most pronounced seasonal slowdown and posting the largest deviations from their typical spring listing patterns (see Table 4).
Inventory Remains at Record High While Growth Momentum Fades
Figure 2: Monthly Active Inventory, 2026
Source: Texas Real Estate Research Center analysis of Data Relevance Project, Texas REALTORS® data
- Statewide, inventory rose moderately, ending in April with approximately 150,300 active listings, up 3 percent from the previous month and 0.6 percent from a year earlier.
- Active inventory supply reached 5.3 months in May, down from 5.4 months a year ago. Although inventory remains elevated by historical standards, months of supply fell below year-ago levels for the first time in the current cycle.
- As of May, inventory conditions varied across the major metropolitan areas (see Table 4). Austin and Dallas-Fort Worth recorded moderate YoY declines in both active listings and months of supply, while Houston and San Antonio experienced increases in both measures
Texas Home Price Declines Show Signs of Stabilization
Figure 3: Texas HPI: Texas and Regional Home Price Trends
Note: The year-over-year change in the price index is calculated using a three-month moving average ending in the report month. Source: Texas Real Estate Research Center analysis of Data Relevance Project, Texas REALTORS® data
- Home prices continued to soften through May, extending the decline to 12 consecutive months, a trend that began a year ago in June 2025.
- Statewide, home prices were 0.6 percent below year-ago levels. However, there are growing signs that the pace of price softening is moderating across much of the state. Preliminary June data suggests this trend is continuing.
- Price weakness is still most pronounced in Austin, where home prices declined 2.9 percent in May. Even so, price corrections appear to be nearing a bottom in most major markets, with the notable exception of San Antonio.
- In San Antonio, the inventory pressure continues to build up moderately through May, contributing to ongoing downward pressure on prices.
- The Fort Worth-Arlington market showed early signs of recovery, with home prices posting a small YoY gain in May.
Local Housing Market Indicators
Table 3: Metro-Level Home Sales, May 2026
Source: Texas Real Estate Research Center analysis of Data Relevance Project, Texas REALTORS® data
Table 4: Metro-Level Month-End Inventory, May 2026
Source: Texas Real Estate Research Center analysis of Data Relevance Project, Texas REALTORS® data
Table 5: Single-Family Housing Permits, May 2026
Note: Permit value is builder estimated construction cost of the residential structure, not including land acquisition cost.
Source: Survey of New Construction of U.S. Census Bureau
Source: Texas Housing Insight | July 2026 | Texas Real Estate Research Center (by Yanling Mayer)
