The housing market in Austin demonstrated a notable stability in 2025, with home prices and sales remaining relatively unchanged, alongside consistent mortgage rates. For those looking to buy a home in Austin this past year, the experience may have been somewhat less burdensome financially compared to two years ago, as home prices have seen a slight decline and the number of available properties has increased.
Looking ahead to 2026, buyers and sellers can anticipate a continuation of these trends, based on insights from the Austin Board of Realtors.
Vaike O’Grady, a market research advisor at the Austin Board of Realtors, noted that the market has begun to cool, indicating a potential decrease in prices. This shift follows several years of fluctuations marked by high mortgage interest rates and erratic home prices.
“Overall, the market hasn’t experienced significant pricing issues, which has its pros and cons,” O’Grady explained. “Sellers are generally satisfied with their asking prices if set correctly, but this does not ease the burden for buyers. However, with a rise in inventory, it suggests we may witness a softening of prices as we enter the early months of 2026.”
A Steady Market
The current steadiness of the market can be attributed to several factors: mortgage rates, home prices, and the number of homes available for sale.
Mortgage interest rates, which influence monthly payments, are currently around 6%. O’Grady indicated that experts anticipate these rates to remain stable or potentially decrease further in 2026. While these rates are higher than those seen during the pandemic, they have been on a downward trend. If this trend continues, it will provide favorable conditions for buyers, as lower rates reduce the overall cost of purchasing a home.
In terms of pricing, the market has remained relatively flat. As of October, the median home price in the Austin-Round Rock-San Marcos Metropolitan Statistical Area reached $439,000, marking a modest 1% increase year-over-year. This figure is down from a peak of $480,000 in June 2023, according to data from the Austin Board of Realtors.
“We’ve been fluctuating between $420,000 and $480,000 for the median sales price over the past couple of years,” O’Grady stated. “We seem to have settled into this price band across the market.”
However, she pointed out that home prices in suburban regions tend to be lower and are expected to remain so, particularly as new developments emerge in these areas.
This trend is likely influenced by the increased availability of homes for sale in areas surrounding Austin, including Williamson, Hays, and Bastrop counties, as well as San Antonio. As supply rises, prices may follow suit and decline.
“People want to stay in Texas but are willing to look a bit further out,” O’Grady remarked. “Builders are exploring ex-urban locations that were not previously considered, as they aim to provide housing options that are more affordable.”
Looking Ahead to 2026
Tommy Tucker, a local home builder and president of the Home Builders Association of Greater Austin, commented on the challenges faced in the past year regarding new home construction, particularly due to the impact of tariffs on material and labor costs. However, he noted that conditions have started to normalize in recent months.
“It’s better than it was in the spring when the costs for lumber, concrete, and steel were chaotic,” Tucker explained. “Those prices have stabilized… These are commodities we deal with, and they do fluctuate.”
As 2026 approaches, Tucker is optimistic that the market will continue on a path of improvement and balance.
“We are beginning to see a bit more equilibrium in terms of supply,” he stated. “While the market isn’t thriving, it appears to be stabilizing and moving toward a more balanced state.”
With home prices remaining steady throughout 2025, Austin city officials are hopeful that modifications to home construction regulations will help decrease housing costs.
The city’s Home Options for Mobility and Equity (HOME) initiative aims to expand housing availability and diversify housing types to enhance affordability for homebuyers.
A recent report indicated that the city’s efforts are progressing positively, with numerous permits already granted for increased density in single-family neighborhoods, showing minimal negative impacts such as displacement. Stevie Greathouse, a division manager within Austin’s planning department, expressed optimism for a gradual increase in the program’s impact in the coming year.
“The goal of the HOME initiative is to develop smaller housing units that could be more affordable by placing smaller buildings on smaller lots,” Greathouse explained. “However, there is no singular regulation that will fully address the opportunities we seek for Austinites, and [HOME] is just one of many tools at our disposal.”
Correction: A previous version of this story misquoted Vaike O’Grady, stating that “builders are going into urban locations.” It should have indicated “builders are going into ex-urban locations,” referring to areas beyond the city’s suburbs.
Support for housing news coverage comes from the Austin Community Foundation and Viking Fence. Sponsors do not influence editorial decisions.
