Texas Real Estate Market Outlook For 2026

Key Takeaways:

• Market Baseline: Texas continues to show real estate resilience as job growth and population shifts drive steady housing demand across regions.
• Residential Forecast: Affordability remains a pressure point, while demand in suburban and rural areas is leading new development trends.
• Tax Focus: Property tax valuations are rising in key markets, making expert guidance essential for property owners navigating 2026.

The Texas real estate market has seen tremendous shifts over the past several years. With continued population growth, changing interest rates, and varying levels of supply across different regions, both residential and commercial sectors are moving into 2026 with a mix of challenges and opportunities. Buyers, investors, developers, and property owners are watching closely to see how these trends will impact affordability, tax exposure, and long-term planning. Understanding what’s ahead isn’t just helpful, it’s necessary for making informed decisions.

At Harding & Carbone, we specialize in helping property owners navigate the financial impact of real estate changes through accurate property tax representation. For over 50 years, we’ve supported clients with valuation challenges, tax savings, and insight into how market conditions translate into real-world tax obligations. Our experience spans all property types across Texas, and we remain focused on helping clients protect the value of their assets.

Where The Texas Housing Market Stands Today

As of late 2025, the Texas housing market remains one of the most active and closely watched in the country. Despite a national slowdown earlier in the decade, Texas has maintained steady growth, driven by job creation, business relocation, and population inflows from other states. Home prices have stabilized after the post-pandemic surge, with certain metro areas like Austin, Dallas, and Houston showing signs of renewed competitiveness.

Inventory levels have improved modestly, though housing supply continues to trail long-term demand in many fast-growing suburbs. Interest rates have settled after several rounds of tightening, providing a more predictable lending environment for both buyers and investors.

Harding & Carbone helps property owners stay ahead of changing market dynamics through trusted tax reduction strategies and valuation expertise. Explore how we support property owners across Texas.

Population Growth And Migration Trends Across Texas

Population shifts are one of the strongest forces influencing the Texas housing market. As more people and businesses move to the state, demand for housing and infrastructure continues to evolve. The following key trends help explain how migration patterns are shaping real estate across the state:

Urban Growth In Major Metro Areas

The Dallas-Fort Worth, Houston, Austin, and San Antonio metro regions continue to lead in population growth. These areas benefit from strong job markets, large-scale developments, and major transportation hubs that draw both domestic and international newcomers. Increased demand has led to rising property values and more competitive housing markets in urban cores and surrounding suburbs.

Emerging Demand In Secondary Cities

Cities like Lubbock, Waco, Midland, and College Station are seeing increased population growth due to expanding universities, healthcare systems, and regional industries. These areas are attracting residents seeking lower housing costs without sacrificing quality of life or career opportunities. As a result, new residential developments are expanding into previously underbuilt areas.

Suburban And Rural Shifts Driven By Remote Work

The widespread adoption of remote and hybrid work has changed where people choose to live. Many are leaving high-cost metro areas for suburbs and rural communities, creating new housing demand in places that historically experienced slower growth. This trend is reshaping land use patterns and prompting reevaluation of long-term housing strategies.

Economic Factors Likely To Influence 2026 Real Estate

Economic performance plays a defining role in how the Texas housing market responds in the coming year. With a blend of state-level policies and national trends, several key economic indicators are already pointing to where the market may be heading:

Job Growth And Industry Expansion

Texas continues to lead the nation in job creation, particularly in technology, energy, healthcare, and manufacturing. This steady employment growth draws new residents and boosts consumer confidence in housing. Strong labor markets also tend to support upward pressure on home prices and rental demand.

Interest Rates And Lending Conditions

Interest rates have moderated after multiple cycles of increases earlier in the decade. While borrowing remains more expensive than pre-2020 levels, the current environment is more stable, allowing buyers and investors to make longer-term financial decisions. Lenders have adjusted with more flexible loan products, especially in markets seeing rapid development.

Construction Costs And Supply Chain Pressures

The cost of construction materials and labor remains a concern for developers. Although supply chain disruptions have eased since the height of the pandemic, inflationary pressures continue to impact project timelines and budgets. These factors can slow down housing starts and add to affordability challenges in high-demand regions.

Residential Market Forecast: Affordability, Demand, And Development

Texas continues to face a balancing act between population growth and housing supply. As demand for residential properties increases, questions around affordability and development capacity become more pressing. Looking ahead to 2026, several themes are likely to shape the trajectory of the residential housing market:

Affordability Pressures In Major Metro Areas

Although home prices in metro areas like Austin, Dallas, and Houston have cooled slightly from previous highs, affordability challenges remain. Many middle-income buyers are finding it increasingly difficult to purchase homes within city limits, leading to growing interest in surrounding suburbs where housing costs are somewhat lower.

Shifts In Buyer Preferences

More buyers are prioritizing home features that reflect evolving lifestyles, including dedicated workspaces, outdoor areas, and energy-efficient upgrades. This shift has led to increased demand in suburban and smaller-town markets, where developers can offer larger lots and more flexible home designs at a lower price point.

Development Trends And Regulatory Factors

While Texas maintains a reputation for being development-friendly, builders still face constraints tied to zoning regulations, infrastructure readiness, and rising costs. These limitations can delay housing projects, particularly in fast-growing regions where demand continues to outpace supply.

Harding & Carbone supports property owners and developers in navigating property valuations during periods of rapid change.Learn more about our property tax services and how we bring clarity to real estate planning.

Commercial Real Estate Outlook And Investment Activity

As the residential market adjusts to rising demand and affordability concerns, commercial real estate in Texas is undergoing its own transition. From office spaces to industrial parks, different sectors are reacting in unique ways to economic shifts and investment trends. Looking toward 2026, these developments will shape how investors and property owners approach commercial assets:

Shifting Office Space Demand

Remote work has permanently altered the way businesses use office space. Many companies are downsizing or reconfiguring existing leases, leading to increased vacancies in some urban centers. However, flexible coworking spaces and suburban office developments are attracting renewed interest, especially in markets with strong job growth.

Strength In Industrial And Logistics Sectors

The industrial real estate sector remains one of the strongest across Texas, fueled by continued growth in e-commerce, manufacturing, and regional distribution. Markets such as Dallas-Fort Worth and Houston are seeing high demand for warehouse and logistics space, with developers racing to meet tenant needs for scale and access.

Retail And Mixed-Use Adaptation

Retail is showing signs of recovery through mixed-use developments that combine shopping, dining, and residential units. Projects that serve growing suburban populations are gaining traction, particularly in walkable areas near new housing. Retailers are also focusing on experiential offerings and local services to maintain foot traffic and tenant stability.

Tax Considerations For Texas Property Owners In 2026

As the real estate market evolves, property taxes remain a major factor for both residential and commercial owners across Texas. With rising valuations in many parts of the state, understanding tax implications is critical for long-term financial planning. These key areas are especially relevant heading into 2026:

Rising Valuations And Property Tax Burden

Many property owners are seeing their tax bills increase alongside growing market values. This is particularly evident in fast-growing regions where demand has driven up appraisal figures. Without proactive management, these rising valuations can significantly impact operating costs and investment returns.

Challenges In The Appeal Process

Navigating the property tax appeal process can be complex, especially for commercial property owners dealing with large portfolios. Filing deadlines, documentation requirements, and local procedures vary widely, making experience and accuracy essential. Those who engage qualified professionals are often in a better position to challenge overassessments effectively.

Legislative And Policy Developments

State-level discussions on property tax reform continue, with proposals focused on capping increases, adjusting school funding formulas, or expanding exemptions. While outcomes remain uncertain, property owners should stay informed about potential changes that could alter how taxes are calculated or applied in the coming years.

Final Thoughts

The Texas real estate market is entering 2026 with a mix of optimism and caution. Strong population growth, economic resilience, and steady investor interest continue to support long-term demand across residential and commercial sectors. At the same time, challenges around affordability, development capacity, and tax pressures are prompting property owners to be more strategic than ever.

Staying informed about local market conditions, regulatory changes, and valuation trends will be key to making sound real estate decisions in the year ahead. While growth is expected to continue, the pace and shape of that growth will vary widely depending on location and asset type. Texas remains a competitive, dynamic landscape for buyers, sellers, and investors alike.

Harding & Carbone brings decades of experience helping clients manage property tax obligations in changing market conditions. Connect with our team to discuss how we can support your goals in 2026 and beyond.

Read Also:

• Real Estate Tax Vs Personal Property Tax: What Sets Them Apart
• Real Estate Taxes And Property Taxes Explained: Understanding The Key Differences
• Texas Property Tax Rates Demystified For Homeowners

Frequently Asked Questions About Texas Real Estate Market Outlook For 2026

What are some lesser-known factors influencing Texas housing prices in 2026?

Local school district ratings, municipal infrastructure plans, and neighborhood walkability scores are playing a larger role in driving buyer interest and home values.

How are short-term rentals affecting the Texas housing market?

The rise of short-term rental platforms is tightening inventory in tourist-heavy regions, especially near lakes, coastal towns, and popular cultural districts.

Is the land market performing differently than developed residential property?

Yes, raw land sales are increasing in rural and suburban fringe areas, often purchased by investors or developers anticipating future housing demand.

How is climate risk shaping real estate decisions in Texas?

Flood zones, drought conditions, and insurance costs tied to climate risk are becoming key factors in where and how people choose to invest in property.

Are property investors still targeting multifamily units in Texas?

Multifamily investment remains strong, particularly in mid-sized cities where construction costs are lower and rental demand is steadily rising.

What role do opportunity zones play in current market activity?

Designated opportunity zones are attracting long-term investors interested in tax advantages, especially in underdeveloped pockets within growing metro areas.

How are Texas border towns performing in the real estate market?

Markets along the Texas-Mexico border are showing gradual growth, supported by cross-border commerce, industrial development, and population expansion.

What impact is public transportation development having on housing?

New transit corridors are increasing demand for properties near proposed or expanding lines, making transit-oriented development more attractive to buyers.

Are there signs of overbuilding in any Texas markets?

Some high-growth suburbs have seen signs of potential overbuilding, especially where speculative construction has outpaced local job or population growth.

How are first-time buyers adapting to tighter lending standards in Texas?

Many first-time buyers are pooling resources with family members, looking into shared equity programs, or targeting smaller markets with more accessible pricing.