Houston Housing Market 2026: What Sellers Need to Know

Houston is the largest city in Texas, the fourth-largest in the nation, and one of the most economically diverse metros in the country. But in 2026, the Houston housing market is sending sellers a complicated message: single-family prices are holding, condos are crashing, inventory is surging, and the window for easy sales has closed.

This guide breaks down the latest Houston market data, explains the divergence between single-family and condo markets, and explores why more sellers are choosing cash offers to navigate an increasingly uncertain landscape.

Houston 2026 Market Overview: The Numbers

Houston's housing market in 2026 is defined by a single word: divergence. The headline numbers mask dramatically different realities depending on what type of property you own and where it sits.

Here is a snapshot of where the Houston housing market stands right now:

Affordability has been improving for 15 of the past 18 months, driven by the combination of slightly lower prices and the mortgage payment decline. But improved affordability has not translated into stronger buyer activity — inventory continues to build, and homes are sitting longer.

Data sources: Houston Association of Realtors, Texas Real Estate Research Center, US Census Bureau, Zillow, Redfin

Price Trends: Single-Family vs. Condo Divergence

The Houston housing market is telling two very different stories depending on property type, and sellers need to understand which story applies to them.

Single-Family: Mostly Stable With a Slight Dip

The median single-family home price of $322,045 represents a modest 0.9% decline year-over-year — essentially flat. The average price of $416,722 is actually up 2.8%, pulled higher by continued activity in the upper price tiers. For most single-family homeowners, the headline is reassuring: prices are not crashing.

But the surface stability masks some important dynamics. Homes are selling at an average of 7.4% below their list price, which means sellers who overprice are getting punished. Price per square foot is declining in many suburban areas while remaining stable in the Inner Loop. And new construction is competing aggressively with resale inventory, especially in master-planned communities on the city's western and northern edges.

Condo/Townhome: A Market in Distress

The condo and townhome segment is a different picture entirely. The median price has dropped to $185,000 — down 11.9% year-over-year and the lowest level since February 2021. Supply has ballooned to 7.6 months, well into buyer's market territory. Midtown and the Galleria area are seeing the most severe oversupply.

This is not a temporary dip. Condo sellers are competing against a flood of new inventory from projects that broke ground during the boom years, rising HOA fees that are eroding buyer budgets, and increasing insurance costs that make condo ownership more expensive than many buyers expected.

The Luxury Segment

Homes priced above $750,000 are sitting the longest of any price segment. The luxury buyer pool has contracted as higher rates reduce purchasing power, and many luxury listings are spending 90-120+ days on market before receiving offers. If you own a high-value property and need to sell on a timeline, the traditional market could mean a very long wait.

Inventory Surge and What It Means for Sellers

Houston's 34,570 active listings represent a 16.6% increase over last year, and the trend is accelerating. Months of supply has risen from 4.2 to 4.7 and is heading toward the 6-month threshold that traditionally defines a buyer's market.

Builders are adding to the supply pressure. New construction permits remain elevated, and completed but unsold homes are sitting in subdivisions across the metro. However, there is a silver lining: builders are starting to scale back new starts. This pullback in housing starts is a leading indicator that suggests the market may be approaching a floor — builders are signaling they believe supply has caught up with demand.

What Rising Inventory Means in Practice

• More competition: Buyers have more choices, which means less leverage for sellers
• Builder incentives are your competition: Rate buydowns, closing cost credits, and free upgrades from builders are hard for resale sellers to match
• Price reductions are common: Overpriced listings sit for weeks before sellers accept reality and reduce
• Buyer negotiation power: Inspection repair requests, concession demands, and appraisal contingencies are all back on the table

For sellers, the message is clear: the days of listing your home and receiving multiple offers within a weekend are over. Pricing correctly from the start and being realistic about timelines are essential in this market.

Days on Market: Why Traditional Sales Are Slowing

The average Houston home is now sitting on the market for 66 days — up from 61 days a year ago and a dramatic increase from the sub-30-day averages of the pandemic boom. And 66 days is the average; overpriced homes, condos, and properties needing work often sit 90 days or more.

The True Cost of Time on Market

Every day your home sits unsold, you are paying to own it. For the median-priced Houston home, the monthly carrying costs add up quickly:

• Mortgage payment: ~$1,500/month
• Property taxes: ~$670/month ($8,050/year at 2.5% rate)
• Homeowners insurance: ~$550/month ($6,610/year)
• Maintenance and utilities: ~$300/month
• Total monthly carrying cost: ~$3,020

At $3,020 per month, a traditional sale that takes 4 months from listing to close costs you $12,080 in carrying costs alone — before accounting for agent commissions, repairs, staging, and potential price reductions. And in a declining market, every month on market means your home may be worth less than when you listed it.

Population Boom: 140,000 New Residents and Counting

Texas added 391,243 people in a single year — a 1.2% growth rate that is 2.5 times the national average. Houston absorbed approximately 140,000 of those new residents, making it one of the fastest-growing metros in America.

This population growth is powered by Houston's remarkably diverse economy:

• Energy: Houston remains the energy capital of the world, and the green energy transition is adding new jobs even as traditional oil and gas evolves. Renewable energy companies are establishing major operations in the metro
• Healthcare: The Texas Medical Center is the largest medical complex on Earth — 106,000 employees, 10 million patient encounters per year. Healthcare jobs are recession-resistant and growing
• Technology: Houston's tech sector is expanding rapidly, with companies drawn by the lower cost of living, no state income tax, and a deep talent pool from local universities
• Logistics: The Port of Houston is the busiest port in the US by foreign tonnage. The logistics and shipping sector supports hundreds of thousands of jobs
• Corporate relocations: Companies continue to move operations to Houston, drawn by the same business-friendly environment that has made Texas the top destination for corporate relocations nationwide

This sustained population growth creates long-term housing demand and investor confidence. Even though the market is softening in the short term, the fundamentals that attract people and capital to Houston remain exceptionally strong. For sellers, this population pipeline is the backstop that prevents a modest correction from becoming a crash.

Submarket Breakdown: Inner Loop vs. Suburbs vs. Counties

Houston is not one market. It is a sprawling metro with distinct submarkets that are performing very differently in 2026. Understanding where your property sits is critical for setting realistic expectations.

Inner Loop (Heights, Montrose, EaDo, Midtown)

The most stable prices in the metro. These neighborhoods benefit from limited land for new construction, strong rental demand from young professionals, walkability premiums, and proximity to major employment centers. Renovation opportunities remain attractive to investors. If you own a single-family home inside the Loop, your property is holding value better than most of the metro. However, Midtown condos and townhomes are an exception — oversupply in that specific segment is dragging prices down even in this desirable location.

Katy and Sugar Land (West)

Moderate softening in the family-oriented western suburbs. Katy and Sugar Land remain popular with families drawn by top-rated school districts and master-planned communities. However, heavy new construction in this corridor means resale sellers are competing with builders offering incentives. Prices are holding but negotiations are tougher, and days on market have increased. This remains a good value market for buyers, which means sellers need to be competitively priced.

The Woodlands and Spring (North)

Premium pricing has remained relatively stable in The Woodlands, supported by its reputation as one of the best master-planned communities in the country, strong school districts, and the presence of major employers like Exxon Mobil. Montgomery County property taxes are lower than Harris County in many areas, which is an additional draw. Spring is slightly softer but still performs well relative to the broader metro.

Pearland and League City (South/Southeast)

The most affordable entry point in the Houston metro and one of the fastest-growing areas. These communities attract first-time buyers and investors looking for cash flow. Prices are lower, but so is appreciation potential. Growth is being driven by proximity to the aerospace industry (NASA/Johnson Space Center), healthcare, and the expanding logistics hub near the Port of Houston.

Condo/Townhome: Midtown and Galleria Oversupply

The most distressed segment of the Houston market. Midtown and the Galleria area have significant condo and townhome oversupply — 7.6 months of supply and rising. Median prices are down 11.9%, and sellers are facing a brutally competitive environment. If you own a condo in these areas and need to sell, the traditional market is a long, expensive road. Cash buyers who purchase for rental income are often the most realistic path to a timely sale.

The Insurance + Tax Squeeze Creating Forced Sellers

There is a financial squeeze happening in Houston that is not getting enough attention — and it is creating a wave of motivated sellers who have no choice but to act.

Insurance: $6,610 Per Year and Rising

The average Houston homeowner is now paying $6,610 per year for homeowners insurance — an increase of more than 40% over the past decade. Houston's exposure to hurricanes, flooding, and severe weather has made it one of the most expensive markets in the country for insurance. Some homeowners in flood-prone areas are paying significantly more, especially if they carry both standard homeowners and separate flood policies.

Property Taxes: 2.5%+ Effective Rate

Texas has no state income tax, but it makes up for it with property taxes. The effective property tax rate in the Houston metro exceeds 2.5% in many jurisdictions, which translates to approximately $8,050 per year on the median-priced home. Harris County, Fort Bend County, and many local taxing entities each take their share, and while homestead exemptions provide some relief, the total burden is substantial.

The Combined Squeeze

When you add insurance and property taxes together, the non-mortgage costs of homeownership in Houston exceed $17,000 per year — more than $1,400 per month before you make a single mortgage payment. For many Houston homeowners, taxes and insurance now cost more than the principal portion of their mortgage payment.

This squeeze is creating a class of forced sellers who are current on their mortgages but simply cannot afford the rising non-mortgage costs of owning their homes. These homeowners are not in foreclosure — but they are financially stressed and need to sell before the situation worsens. For these sellers, speed and certainty are paramount: they need to stop the bleeding, not wait 4 months for a traditional sale to close.

Why Cash Sales Are Surging in Houston

Cash transactions are rising as a percentage of total Houston home sales, and the reasons go beyond simple market dynamics.

Speed and Certainty in an Uncertain Market

In a stable or rising market, sellers can afford to wait. The home appreciates while it sits, and any delay is partially offset by price growth. In a softening market, the opposite is true — every week on market costs money and value. Cash offers provide what the traditional market increasingly cannot: a definitive close date and guaranteed proceeds.

No Appraisal or Financing Contingency

Cash buyers do not need lender appraisals, so there is no risk of the deal collapsing because the home appraises below the contract price — a growing concern in a market where prices are softening. There is no lender underwriting, no last-minute loan denials, and no rate lock expirations. When a cash buyer commits, the deal closes.

Seller Fatigue With 66-Day Waits

After weeks of showings, keeping the home spotless, vacating for inspections, and negotiating over repair requests, many Houston sellers are exhausted. The emotional and practical toll of a traditional sale in a slow market is significant — especially for sellers dealing with divorce, relocation, inheritance, the insurance-tax squeeze, or financial hardship. A cash marketplace offers closing in 7-14 days with no showings, no repairs, and no staging.

Traditional Deals Fall Through More Often in Soft Markets

When the market is softening, financed transactions fail at higher rates. Buyers get cold feet and use contingencies to walk away. Appraisals come in below contract price. Lenders tighten requirements. For sellers, a failed deal means starting over from a weaker position — more days on market, a stigma attached to the listing, and usually a price reduction.

Competition Drives Better Offers

A single "we buy houses" company has zero incentive to offer a fair price. But a marketplace that broadcasts your property to hundreds of competing investors changes the dynamic entirely. When investors know they are bidding against each other, they cannot lowball. The fear of losing the deal to a competitor pushes offers higher — even in a soft market. Houston's strong population growth and investor interest mean there are more buyers competing for properties through cash marketplaces than in most metros.

Frequently Asked Questions

Is it a good time to sell a house in Houston?

The Houston market is softening with rising inventory and longer days on market, but cash demand from investors remains strong. The longer you wait, the more you pay in carrying costs — mortgage, taxes, insurance, and maintenance add up to over $3,000 per month for the median Houston home. If you need certainty and speed, cash offers provide a reliable path. If you can wait and your home is in excellent condition, a traditional sale is still viable but expect longer timelines and tougher negotiations.

Are Houston home prices going to drop more in 2026?

Modest further softening is possible, especially in the condo and townhome segment where median prices are already down 11.9% year-over-year. Single-family homes are more stable with only a 0.9% median price decline, and strong population growth of 140,000 new residents per year combined with builder pullbacks suggest the single-family market is near its floor. A crash is unlikely given Houston's economic fundamentals, but condos and overbuilt suburban areas may see continued pressure.

How long does it take to sell a house in Houston right now?

The average days on market in Houston is 66 days — up from 61 days a year ago and continuing to rise. Add pre-listing preparation and the closing period, and a traditional sale takes 4-5 months from decision to cash in hand. Overpriced homes and condos are sitting significantly longer. Cash sales through a marketplace can close in 7-14 days.

What areas of Houston are seeing the biggest price drops?

Condos and townhomes citywide are seeing the steepest declines, with median prices down 11.9% — especially in Midtown and the Galleria area where oversupply is most severe at 7.6 months of inventory. Suburban areas with heavy new construction are also softening as builders compete with resale inventory through incentives. The Inner Loop neighborhoods like the Heights and Montrose are the most stable.

Why are more Houston sellers choosing cash offers?

Speed, certainty, and avoiding the costs of a 66-day wait. In a softening market, traditional deals fall through at higher rates due to financing contingencies, appraisal gaps, and buyer leverage. Cash sales eliminate these risks — no appraisal contingency, no financing fallthrough, and closing in days instead of months. With holding costs exceeding $3,000 per month, the financial case for a fast cash close is stronger than ever.

See What Houston Investors Will Pay for Your Home

The Houston market has shifted, but demand from cash investors remains strong — driven by the region's population growth, economic diversity, and long-term fundamentals. Whether your home is inside the Loop, in Katy, The Woodlands, Pearland, or anywhere across the metro, investors are actively buying.

The question is not whether your home has value. It is whether you are getting competitive offers from multiple buyers — or settling for a single lowball from one company.

Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. Real estate market conditions, laws, and tax rules vary and change frequently. Data cited reflects available sources as of February 2026. Consult with a Texas real estate attorney or financial professional for advice specific to your situation.