After a period of unprecedented growth, the Texas housing market is beginning to cool, reflecting a broader trend seen across the United States.

In June 2026, the average home price in Texas reached approximately $350,000, an increase of just 3% year-over-year, down from double-digit gains recorded in 2021 and 2022. The number of homes sold in Texas during the same period also declined, with transactions dropping by 15% compared to June 2025, according to the Texas Real Estate Research Center.

Factors contributing to this slowdown include rising mortgage rates, which hovered around 7% for a 30-year fixed mortgage. This increase has pressured homebuyers, especially first-time buyers, who are now facing more stringent borrowing conditions.

“We are witnessing a significant shift in buyer sentiment,” explained Sarah Mitchell, President of the Texas Association of Realtors. “Many are opting to wait and see how interest rates will settle before making a purchase.”

Cities such as Austin, which experienced explosive growth over the past five years, are now seeing the market stabilize. In the last quarter, home sales in Austin fell by 20%, while inventory levels rose, granting buyers more options than in previous years.

As inventory levels increased, the average days on market for homes in Austin surged to 45 days, compared to just 30 days a year earlier. This shift is prompting sellers to adjust their expectations, with many reducing their listing prices to attract potential buyers.

In Dallas, the trend mirrors that of Austin, with home prices stabilizing and inventory levels increasing. The city recorded a 10% year-over-year increase in inventory, a significant change from earlier years when homes were snapped up almost immediately.

While the market is cooling, real estate analysts believe it is moving toward a healthier balance between supply and demand. “This stabilization is a necessary correction that should benefit both buyers and sellers in the long run,” remarked David Lee, Senior Economist at the Texas Housing Institute.

As the Texas housing market transitions into this new phase, industry stakeholders are keeping a close eye on economic indicators that may impact future trends.