What Buyers and Sellers Need to Know for 2026

Houston housing market rings in the new year with signs of balance. Here’s what it means for you.

The Houston housing market is entering 2026 with a noticeable shift. Buyers have more homes to choose from, sellers are adjusting to longer timelines, and affordability is quietly improving. According to the latest report from the Houston Association of Realtors, the market is becoming more balanced — and that could create opportunities on both sides of the transaction.

Summary

• Home sales dipped slightly, but buyer demand remains steady.

• Inventory is rising, giving buyers more options and time.

• Affordability improved, with lower monthly payments than last year.

• Luxury homes outperformed, while condos saw a slower start.

Houston Home Sales: A More Balanced Start

In January 2026, 4,999 single-family homes sold in the Houston area — down just 1.0% compared to January 2025. While that marks the fewest January transactions since 2023, pending sales actually rose 8.5%.

That’s an important signal. When pending sales increase, it usually means buyers are still actively making offers. In other words, demand hasn’t disappeared — it’s just operating in a calmer environment.

Home Prices: Mixed but Stabilizing

Home prices moved in two directions:

• Median price: $322,045 (down slightly year over year)

• Average price: $416,722 (up 2.8%)

• Average price per square foot: $171 (lowest since January 2024)

The median price decline suggests some price moderation, especially in mid-range homes. However, the increase in average price was largely driven by the luxury market.

Luxury Market Strength

Homes priced at $1 million and above:

• Represented just 4.2% of listings

• Saw sales rise 15.5% year over year

Meanwhile, homes priced between $250,000 and $499,999 — more than half of all January sales — experienced slower activity.

Homes Are Taking Longer to Sell

Inventory is growing, and that’s changing the pace of the market.

• Homes averaged 66 days on market, up from 61 days last year.

• This is the longest selling timeline since early 2020.

• Active listings increased 16.6% to 34,570 homes.

• Housing supply expanded to 4.7 months, compared to 4.2 months last year.

For comparison, the national average housing supply stands at 3.3 months. More inventory means:

• Buyers feel less rushed.

• Sellers face more competition.

• Pricing strategy matters more than ever.

Affordability Is Improving

Here’s where buyers may find good news. Thanks to slightly lower mortgage rates and a softer median price, monthly payments are down compared to last year.

• January 2026 monthly payment: $1,561.26

• January 2025 monthly payment: $1,722.81

• Savings: $161.55 per month (nearly $2,000 per year)

Houston housing affordability has improved in 15 of the past 18 months, giving hopeful buyers more breathing room.

Townhome and Condo Market Update

The townhome and condominium market had a slower start.

• Sales declined 25.9% year over year (269 units sold).

• Average price fell to $226,343.

• Median price dropped to $185,000 — the lowest since February 2021.

• Inventory climbed to a 7.6-month supply.

This segment currently favors buyers, particularly those looking for more affordable entry points.

Final Thoughts

The Houston housing market isn’t overheating — and it isn’t collapsing either. Instead, it’s adjusting. Buyers now have more homes to choose from, more time to decide and affordability is moving in the right direction. Sellers can still expect solid offers, but strategic pricing is critical, presentation matters and expectations may need to be adjusted. If mortgage rates ease further in 2026, the market could see steady, sustainable momentum rather than dramatic swings.

FAQs

Is now a good time to buy a home in Houston?If you’ve been waiting for more options and less competition, this could be a favorable window. Inventory is rising and affordability has improved compared to last year.

Are Houston home prices falling?Median prices dipped slightly, but the market is stabilizing. Luxury homes are still performing strongly.

How long are homes staying on the market?On average, homes are taking about 66 days to sell — giving buyers more time and reducing bidding pressure that we’ve seen in recent years.