Austin Real Estate Market Update

Austin Real Estate Market Update – February 16, 2026

The Austin real estate market update for Monday, February 16, 2026 shows a market that is more balanced than the frenzy of 2021 and early 2022, yet still clearly tilted toward buyers. Active residential listings now sit at 13,333, which is up 12.0 percent year over year compared to 11,902 at this time last year . While inventory remains well below the previous cycle high of 18,146 reached in late June 2025, supply is meaningfully higher than it was one year ago. For anyone following the Austin real estate forecast, that 12 percent increase in listings is one of the most important data points in today’s report. Nearly half of the market is adjusting to this reality. Currently, 48.6 percent of all active listings have had at least one price drop. That statistic alone tells you that sellers are still chasing demand. When almost one out of every two homes has reduced its price, it reflects a competitive environment where buyers have leverage and pricing discipline matters.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for Monday, February 16, 2026.

New supply is actually slowing. Cumulative new listings from January through mid February total 5,762, which is down 26.3 percent year over year and 5.7 percent below the long term average. In simple terms, fewer sellers are entering the market compared to last year. That could be interpreted as supportive for prices over time, but it is being offset by slower contract activity.

Pending listings are up slightly on a year over year basis. We have 3,895 pending homes compared to 3,804 at this time in 2025, a modest 2.4 percent increase. However, when we zoom out to cumulative pending from January through mid February, contracts total 4,618, which is down 29.9 percent year over year and 22.8 percent below average. That divergence between current snapshot pending and cumulative pending tells us that the pace of demand earlier in the year was materially weaker.

The Activity Index provides a clean way to measure this. Today, the overall Activity Index is 22.6 percent, down from 24.2 percent one year ago, a 6.7 percent decline. New construction is running at 27.71 percent, while resale sits at 20.13 percent. In the resale segment, 20 percent places much of the market in the softening to contraction phase. Historically, expansion requires readings above 30 percent. We are well below that threshold. From an Austin housing forecast perspective, this confirms that demand is not yet strong enough to absorb supply at a pace that would push prices higher.

Another key ratio is the monthly new listing to pending ratio, currently at 0.60. Over the past 25 years, the average annual ratio has been 0.82. This year to date, the ratio stands at 0.69, again below the long term average. When that ratio stays under historical norms, it signals that new listings are not converting to contracts at the pace we have seen in stronger cycles.

Months of Inventory reinforces that message. We are currently at 4.75 months of inventory compared to 4.15 months one year ago, a 14.3 percent increase. In resale only, many submarkets are now in what would be classified as buyer advantage or even buyer control, especially in areas with over seven or eight months of supply. While the City of Austin itself shows a modest 3.4 percent decline in months of inventory year over year, the two year comparison shows supply up 9.5 percent. That longer term view matters for the Austin real estate forecast because it reflects a market that has structurally shifted from extreme scarcity to relative balance.

On the sales side, 1,759 homes closed in February. Cumulative sold properties from January through mid February total 3,433, down 11.4 percent year over year but still 3.5 percent above the long term average. That nuance is important. Volume is weaker than last year, but not historically depressed. However, when we adjust for population, cumulative sold per 100,000 residents is 129, down 13.3 percent year over year and 26.1 percent below average. Sales per 1,000 Realtors sit at 195, down 5.1 percent year over year and 23.2 percent below average. In other words, transactions are being spread across a larger agent base and a larger population, diluting overall velocity.

Pricing trends remain the headline story. The average sold price in February is $563,501. The peak average sold price in May 2022 was $681,939. That represents a 17.37 percent decline, or roughly $118,000 off the peak. The median sold price is currently $438,581. The peak median in May 2022 was $550,000. That is a 20.26 percent drop, or about $111,000 below peak levels. For anyone tracking Austin housing from a long term investment perspective, those peak to current comparisons define the correction.

The lower price tiers are still under more pressure than the top end. In the bottom 25th percentile, prices are down 4.78 percent year over year and price per square foot is down 6.04 percent. In contrast, the top 25th percentile shows prices up 2.53 percent year over year, although price per square foot is slightly down 0.43 percent. This split suggests that entry level buyers are more rate sensitive, while higher end buyers have more flexibility.

Across cities, only 6 out of 30 are up year over year on median price, while 24 are down. The Home Value Index shows that 80 percent of cities are still classified as overvalued, 16.7 percent fairly valued, and just 6.7 percent undervalued. That broad overvaluation reading supports the idea that the Austin real estate market has not fully completed its adjustment.

The absorption rate, defined as sold divided by active listings, is 14.96 percent. The historical average is 31.54 percent. That gap is significant. When absorption is below 15 percent, it signals a sluggish, supply heavy environment. The Market Flow Score, which combines multiple turnover metrics, is 3.21 compared to a historical average of 6.58. Both measures confirm that market efficiency and velocity are running at roughly half of historical norms.

Looking ahead, the market projection model provides context for the Austin real estate forecast. Using the 25 year compound annual appreciation rate of 4.681 percent and assuming today’s median of $438,581 represents the bottom, it would take approximately 64 months, or until May 2031, to return to a projected peak value of $557,216. That projection is not a prediction of immediate recovery, but rather a long term compounding scenario. It highlights that real estate cycles can take years, not months, to normalize.

For buyers, this Austin market update signals opportunity. Higher inventory, nearly half of listings with price reductions, and an absorption rate under 15 percent provide negotiating leverage. For sellers, the data demands discipline. Overpricing in this environment leads to extended days on market and eventual reductions. For investors, the 17 to 20 percent drop from peak, combined with a slower transaction pace, suggests selective opportunities, especially in submarkets where months of inventory are stabilizing.

Austin real estate is no longer in a speculative expansion phase. It is in a normalization phase. Supply is manageable but elevated. Demand is present but cautious. Prices have corrected meaningfully but are not yet showing broad based acceleration. That balanced but buyer leaning posture defines today’s Austin housing market.

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FAQ Section

Is the Austin housing market still declining in 2026?

The Austin housing market has clearly corrected from its 2022 peak, with the median sold price down 20.26 percent from May 2022 levels. However, the pace of decline has moderated compared to earlier stages of the correction. Inventory is higher year over year, and nearly half of listings have reduced prices, which keeps pressure on sellers. At the same time, cumulative sold properties remain above the long term average, which suggests the market is functioning, just at a slower pace. From a data standpoint, the Austin real estate forecast points to stabilization, not a crash, but also not a rapid rebound.

How much have Austin home prices fallen from the peak?

The median sold price peaked at $550,000 in May 2022 and is now $438,581, a drop of 20.26 percent or about $111,000. The average sold price has declined 17.37 percent from its peak of $681,939 to $563,501. These are meaningful resets in value. For buyers, this represents improved affordability relative to the peak. For sellers who purchased near the top, it requires realistic pricing expectations in today’s Austin housing market.

Is now a good time to buy in Austin?

From a supply and demand standpoint, buyers have more leverage than they have had in several years. Months of inventory is 4.75, up 14.3 percent year over year, and the absorption rate is just under 15 percent, well below historical norms. Nearly 48.6 percent of listings have had at least one price reduction, which creates negotiation opportunities. While interest rates remain a factor, the Austin market update shows conditions that favor patient and informed buyers.

What does the Activity Index tell us about Austin real estate?

The Activity Index measures the percentage of active listings that go pending within a defined period. Today, it stands at 22.6 percent overall, with resale closer to 20 percent. Historically, expansion phases require readings above 30 percent. Current levels place much of the market in softening or contraction phases. This means supply is outpacing demand in many submarkets, reinforcing a cautious Austin real estate forecast.

When could Austin home prices return to their peak?

Using the 25 year compound annual appreciation rate of 4.681 percent and assuming the current median price of $438,581 represents a bottom, it would take approximately 64 months to return to a projected peak value near $557,216. That timeline extends into 2031. This is a mathematical projection, not a guarantee, but it provides perspective. Real estate cycles often require multiple years to fully recover, especially after a 20 percent correction.

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.