Texas real estate is slowly recovering after a slow start in 2025, influenced by changes in interest rates, affordability, and the amount of homes available. Based on insights from the Texas Real Estate Research Center, current real estate forecasts point to a cautious but steady outlook for residential properties across 2026, offering guidance on expected trends in demand, pricing, and development activity.

Single-family homes remain the largest residential category in Texas, with millions of detached units statewide. By late 2025, sales activity began to recover following a weak early year. Gradually declining mortgage rates helped improve affordability, while elevated inventory levels gave buyers more negotiating room. At the same time, home values softened across much of the state as pricing adjusted to current market conditions.

Looking ahead across 2026, real estate forecasts suggest a modest recovery rather than rapid expansion. Builders are expected to slightly increase new home construction as financial conditions ease, which will raise building permits modestly. Buyers are likely to drive gradual growth in sales activity, supported by lower interest rates and ongoing price adjustments that help balance expanding inventory.

Home prices will likely post only limited gains. This points to a more balanced and competitive market rather than strong appreciation. Single-family rents are expected to rise slightly through December 2026, but results will vary by location. Markets with excess apartment supply may experience slower rent growth, while areas with steady population and job growth may remain more resilient.

Texas entered 2026 with a sizable apartment inventory following elevated construction activity in the prior year. This wave of new units contributed to softer rent growth and increased competition among properties, even as overall demand remained supported by population gains.

Through December 2026, multifamily construction activity is expected to slow considerably. Lower delivery volumes should help stabilize inventory levels statewide. While rent growth is likely to remain subdued, newer communities may continue to command higher rents in select markets. In contrast, many stabilized properties may see little to no rent growth, reinforcing a cautious outlook within current real estate forecasts for the apartment sector.

Overall, Texas residential real estate is moving toward stabilization rather than expansion. The latest real estate forecasts from the Texas Real Estate Research Center indicate gradual improvement across 2026, supported by easing interest rates, steady population growth, and reduced construction activity. While uncertainty remains, particularly around financing and broader economic conditions, both single-family and multifamily markets are expected to settle into more predictable patterns as the year progresses.