Austin Real Estate Market Update

Austin Real Estate Market Update – January 21, 2026

As of Wednesday, January 21, 2026, the Austin housing market reflects a clear imbalance between supply and demand that continues to define this cycle. Active residential listings currently sit at 12,753, which is up 12.3 percent compared to this time last year. While this is still well below the peak of 18,146 active listings reached in late June 2025, the elevated inventory level signals that sellers are competing more aggressively for a smaller pool of qualified buyers. More than half of all active listings, 53.0 percent, have already experienced at least one price reduction, reinforcing that initial list pricing is still misaligned with today’s buyer expectations.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for January 21, 2026.

New construction continues to play a significant role in overall supply, with 3,937 homes currently on the market, while resale listings account for 8,816. This split matters because demand conditions are very different between the two segments. Builders remain more active and more flexible, while resale sellers are experiencing slower absorption and longer market times. For buyers, this creates more leverage in resale negotiations and more incentives in new construction, especially in communities with higher inventory concentrations.

Pending listings tell a different story and help explain why pricing pressure persists. There are currently 3,424 homes under contract, which is down 2.1 percent year over year. Despite more homes being available, fewer are moving into contract. This is one of the clearest signals of a demand constrained environment. When active listings rise faster than pending activity, inventory builds and competition among sellers intensifies.

The Activity Index captures this imbalance clearly. The overall Activity Index for January 2026 is 21.2 percent, down from 23.5 percent last year. That represents a 10.1 percent decline year over year and places the market firmly in the softening range. New construction activity remains stronger at 26.49 percent, which sits near equilibrium, while resale activity has dropped to 18.53 percent. Resale homes are now largely operating in the contraction and danger zone, where transactions slow and price discovery becomes more difficult.

When activity is broken down further by resale market phases, a significant portion of the Austin market is no longer functioning normally. Over 50 percent of resale areas fall into either the contraction or crisis categories, where buyer hesitation increases and price corrections accelerate. Only a small share of the market remains in equilibrium or expansion. This explains why sellers are struggling to achieve aggressive pricing and why listings are taking longer to secure offers.

The New Listing to Pending Ratio reinforces this trend. The monthly ratio currently stands at 0.60, well below the 25 year average of 0.82. This means that for every new listing coming to market, only 0.60 are going under contract. Year to date, there are 653 more new listings than pending listings. Historically, when this ratio stays this low for extended periods, inventory continues to build and pricing pressure remains downward.

Months of inventory provides another clear indicator of market balance. Austin is currently at 4.52 months of inventory, up 14.0 percent from 3.97 months at this time last year. While this is not an extreme oversupply, it firmly shifts leverage toward buyers. In resale only segments, a growing share of cities and zip codes now fall into buyer advantage or buyer control conditions, where excess supply leads to longer days on market and increased concessions.

Sales activity has remained relatively resilient in raw transaction counts, but context matters. There have been 1,864 homes sold year to date, down just 0.9 percent year over year and 22.0 percent above the long term average. However, when adjusted for population growth, the picture changes. Sales per 100,000 residents sit at 70, which is 12.9 percent below average. Sales per 1,000 Realtors are at 108, up 6.7 percent year over year but still 8.1 percent below average. This means agents are competing harder for fewer transactions per capita, even though total sales appear stable.

Price trends continue to reflect the slower market environment. The average sold price in January is $583,005, which represents a 14.51 percent drop from the May 2022 peak of $681,939. The median sold price is $429,990, down 21.82 percent from its peak of $550,000. These declines confirm that Austin has undergone a meaningful price correction, particularly in the middle of the market where affordability pressures are greatest.

When comparing median prices to levels from 36 months ago, values are currently 4.44 percent lower. This indicates that recent appreciation has been fully erased and that the market is still searching for a stable floor. Long term fundamentals remain intact, but the path back to peak pricing will not be quick. Based on Austin’s 25 year compound appreciation rate of 4.601 percent, and assuming the current median price represents the bottom of the cycle, it would take approximately 67 months, or until July 2031, to return to peak values near $550,700.

Price performance also varies significantly across price tiers. Homes in the bottom 25 percent of the market saw prices decline 2.38 percent year over year, with price per square foot down 4.82 percent. In contrast, the top 25 percent of the market experienced price growth of 7.83 percent, with modest gains in price per square foot. This split highlights a market where higher end buyers remain active while entry and mid level buyers face affordability and financing constraints.

The absorption rate, or sold to active ratio, currently stands at 23.75 percent, well below the historical average of 31.61 percent. This confirms slower turnover and weaker demand relative to supply. At the same time, the Market Flow Score is 8.59, above its historical average of 6.59. This suggests that while the market is slower, the transactions that do occur are moving with reasonable efficiency, driven by motivated buyers and sellers who are aligned on pricing.

For buyers, this Austin housing forecast points to continued opportunity. Inventory remains elevated, price reductions are common, and negotiating leverage is firmly in the buyer’s favor, especially in resale homes. For sellers, the data is clear. Pricing correctly from day one is critical, and overpricing leads to longer market times and eventual reductions. For investors, patience and selectivity are essential, as returns depend heavily on basis and long term holding horizons.

From a broader perspective, this Austin real estate forecast reflects a market that is normalizing after years of excess. The correction has been meaningful, demand has cooled, and pricing power has shifted. While the market is not in crisis, it is no longer forgiving. Data driven decisions are now essential for anyone operating in Austin housing today.

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FAQ Section

Is the Austin housing market cooling in 2026?

Yes, the Austin housing market is clearly cooling based on multiple indicators. Active listings are up more than 12 percent year over year while pending listings are down. The Activity Index has fallen into the softening range, and over half of all listings have reduced their price. These trends confirm slower demand and increased competition among sellers.

Are home prices still falling in Austin?

Home prices have declined significantly from their 2022 peaks, with the median sold price down nearly 22 percent. While monthly declines have slowed, prices remain under pressure due to elevated inventory and weaker demand. The market is likely in a stabilization phase rather than a rapid rebound. Any recovery will be gradual and data driven.

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

For buyers, current conditions are favorable compared to recent years. Inventory is higher, sellers are more negotiable, and price reductions are common. Buyers who focus on fundamentals, location, and long term value have more leverage than at any point since 2020. However, financing costs and monthly payments still require careful planning.

What does the Activity Index mean for sellers?

The Activity Index measures how many listings are going under contract relative to inventory. At 21.2 percent overall and under 19 percent for resale homes, sellers face slower absorption and longer market times. This means pricing strategy and condition matter more than ever. Sellers who price aggressively above market risk multiple reductions.

When could Austin home prices recover to peak levels?

Based on long term appreciation trends, it could take until around 2031 for median prices to return to previous peaks if current levels represent the bottom. This projection assumes normal economic conditions and steady growth. Short term price spikes are unlikely without a major shift in demand or affordability.

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.