Austin Real Estate Market Update

Austin Real Estate Market Update – January 26, 2026

As of Monday, January 26, 2026, the Austin real estate market shows clear signs of ongoing rebalancing. Active residential listings now stand at 12,777, up 10.8 percent compared to this time last year, but still well below the prior peak of 18,146 reached in late June 2025. That reduction of more than 5,300 listings from the peak reflects seller pullback rather than renewed demand. Inventory is no longer expanding aggressively, but absorption has not recovered enough to support upward price pressure. This places the current Austin housing market in a slow, buyer-leaning environment rather than a true recovery phase.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for January 26, 2026.

Price behavior confirms this shift. Nearly 52 percent of all active listings across the Austin area have experienced at least one price reduction. That level of price adjustment is historically elevated and signals that original list prices are still overshooting what today’s buyers are willing or able to pay. Sellers are increasingly competing on price, concessions, and flexibility rather than relying on urgency or multiple-offer dynamics. For buyers, this creates negotiating leverage that has not existed consistently since before 2021.

Inventory composition also matters. Of the 12,777 active listings, 3,954 are new construction while 8,823 are resale homes. New construction continues to carry higher activity levels, with a new-build Activity Index of 26.78 percent compared to just 19.04 percent for resale homes. Builders are still moving inventory more efficiently due to rate incentives, closing cost assistance, and pricing strategies that individual resale sellers often cannot match. This divergence is an important dynamic for agents advising sellers, as resale listings are facing a more competitive landscape than headline inventory numbers alone suggest.

Pending listings reinforce the story of muted demand. Pending inventory sits at 3,521, essentially flat year over year with a marginal decline of 0.5 percent. In practical terms, demand has not grown alongside supply. That imbalance explains why inventory levels remain elevated and why price pressure continues to favor buyers. When inventory rises faster than contracts, the market slows, regardless of headlines suggesting stabilization.

The Activity Index provides one of the clearest indicators of market health. At 21.6 percent, the Austin Activity Index is down 8 percent from last year and firmly within the softening range. Historically, Activity Index readings between 20 and 25 percent signal slower sales and rising inventory. Large portions of the resale market are now drifting toward the contraction zone, where price declines become more common and days on market extend. This does not represent a market freeze, but it does reflect reduced urgency and increased buyer selectivity.

Supply flow data further supports this conclusion. The monthly new listing to pending ratio currently sits at 0.65, well below the 25 year average of 0.82. Year to date, new listings exceed pending contracts by 616 homes. This means supply continues to outpace demand at a structural level. In healthier markets, this ratio trends closer to one, where new listings are being absorbed at a balanced pace. Today’s gap reinforces that Austin remains oversupplied relative to buyer activity.

Months of inventory now stands at 4.54, up 12.5 percent from last year. This places the market firmly in buyer advantage territory, particularly for resale homes. While not yet at levels associated with severe price declines, the trend direction matters. Inventory is moving away from balance rather than toward it. For sellers, this means pricing accuracy is critical. For buyers, it means time is working in their favor.

Sales volume adds another layer of nuance. A total of 1,834 homes have sold year to date, down 2.4 percent year over year but still 20.2 percent above the long-term average. This suggests that while transaction counts remain historically decent, they are being supported by population growth and long-term baseline demand rather than current momentum. When adjusted for population, sales per 100,000 residents are down 14.2 percent compared to average levels. This confirms that demand per capita remains weak.

Price trends remain one of the most important signals for forecasting. The average sold price in January is $572,117, down more than $110,000 from the May 2022 peak, representing a 16.1 percent decline. The median sold price tells an even clearer story. At $415,000, the median is down nearly $135,000 from its 2022 high, a decline of 24.6 percent. Median prices are now running almost 8 percent below where they were 36 months ago, a rare occurrence for the Austin housing market.

Price performance varies by segment. Homes in the bottom 25th percentile saw prices fall nearly 5 percent year over year, while the top quartile posted modest gains. This bifurcation reflects affordability pressure at the lower end of the market and resilience among higher-income buyers who are less rate sensitive. For investors and agents, this divergence matters when evaluating risk, opportunity, and pricing strategy.

Looking ahead, long-term projections provide important context. Using Austin’s 25 year compound annual appreciation rate of 4.459 percent, and assuming the current median price represents a market bottom, it would take approximately 79 months for prices to return to their prior peak. That places a full recovery around mid-2032. This projection underscores why short-term speculation remains risky and why long-term ownership horizons are increasingly important in today’s Austin real estate forecast.

Demand metrics confirm the broader slowdown. The absorption rate, defined as sold listings divided by active inventory, currently sits at just 9.5 percent. Historically, Austin averages above 30 percent. Readings below 10 percent indicate a sluggish market where buyers hold leverage and sellers must compete aggressively. The Market Flow Score reinforces this reality. At 0.48 compared to a historical average of 6.57, market efficiency remains extremely low, signaling slow turnover and limited momentum.

For buyers, the current Austin housing market offers leverage, choice, and negotiating power that has been absent for years. For sellers, success depends on pricing realism, presentation quality, and flexibility. For investors, the data favors patience, disciplined underwriting, and long-term positioning rather than short-term appreciation bets. For agents, this environment rewards education, data literacy, and strategic guidance rather than volume-driven tactics.

Austin real estate is not collapsing, but it is recalibrating. The excesses of the 2020 to 2022 cycle continue to unwind through price corrections, slower absorption, and higher inventory. This is what normalization looks like, and it often takes longer than most expect.

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FAQ Section

Is the Austin housing market declining in 2026?

The Austin housing market is not collapsing, but it is correcting and rebalancing. Median prices are down more than 24 percent from the 2022 peak, and inventory has risen over 10 percent year over year. Demand has not kept pace with supply, which is why price reductions are widespread. This environment reflects normalization rather than crisis, but it still favors buyers.

Is now a good time to buy a home in Austin?

For buyers with stable finances and a long-term horizon, current conditions are more favorable than they have been in years. Inventory is elevated, over half of listings have reduced prices, and absorption remains low. These factors increase negotiating leverage and reduce competitive pressure. Buyers should focus on fundamentals rather than timing a short-term bottom.

When will Austin home prices recover?

Based on long-term appreciation trends, a full return to peak median prices could take until around 2032. This assumes a normal historical growth rate and that the current median represents a market bottom. Recovery will likely be gradual rather than rapid. Price growth is more likely to be uneven across price ranges and locations.

Why are so many homes cutting prices in Austin?

Price reductions are occurring because sellers are adjusting to slower demand and higher inventory levels. Many listings were initially priced based on outdated expectations from the 2021 and 2022 market. As days on market extend, sellers are forced to realign with current buyer behavior. This is a typical phase during market normalization.

What does the Activity Index say about the Austin real estate forecast?

The Activity Index at 21.6 percent places the market in a softening phase. This indicates slower sales, rising inventory, and reduced urgency among buyers. Historically, markets in this range experience continued price pressure until demand improves or supply contracts. It is a key signal that Austin remains in a buyer-leaning environment.

Have a Question or Want to Dive Deeper?

If you’d like a custom breakdown of the data, want help interpreting today’s market trends, or just have a question about buying or selling in Austin, let us know. Fill out the form below and a member of our team will get back to you promptly.