Mary’s Market Watch: Q2 2026
- Mary McLean
- Jul 31
- 6 min read
In Summary
Yes, you are seeing more signs in the yard and more price reductions on Zillow!
That’s because the national and local real estate markets are currently in a period of transition. Elevated mortgage rates continue to cool buyer demand and increase inventory from historical lows. Due to shifting buyer demand, the U.S. is leaning more towards a buyer's market, giving purchasers stronger negotiating power than in previous years. This also holds true of our local market in North Texas.
In Other News
21st Century ROAD to Housing Act. This historic, bipartisan law went into effect on July 11 and aims to address the issue of housing affordability. Specifically, this law will prohibit additional purchases of single-family homes by large institutional investors (those that own at least 350 single-family homes), ease construction rules, cut building delays, reauthorize and reform certain government programs, and increase community bank investment caps for affordable housing tax credits, among other changes.
Interest Rates. As inflation and the war with Iran loom large, Federal Reserve Chair Kevin Warsh and the Federal Reserve Bank opted to leave interest rates unchanged at their meeting on July 29. The last time the Federal Reserve changed interest rates was in December 2025, when the rate was lowered by 25 basis points.
New Appraisal Forms. Appraisal reports will now look different!
Effective November 2, 2026, the standard “Form 1004” used for nearly 20 years will be retired and replaced with a single, data-driven Uniform Residential Appraisal Report (URAR). This should not impact appraisal valuations, but it will change the form appraisals take, from paper-style to a dynamic, digital format.
How will this affect you? The new appraisal reports should be easier to understand and will be more comprehensive. Sellers may be asked to submit more information to appraisers, and the reports may take longer to prepare. (Source: Olivieri, Joe, “Appraisal Reporting is Changing,” Texas REALTORS®, July 1, 2026.)
A Deep Dive into the Data
U.S. Real Estate Market
There is both good and bad news.
In June, the national median sales price reached a record high of $440,600 (which is good for homeowners), whereas home sales were down as mortgage rates vacillated during Q2 between 6.29% and 6.85% (which are considered high by today’s standards).
As of July 27, the average 30-year fixed-rate mortgage was 6.77%, according Mortgage News Daily (Source: Graham, Matthew, “Mortgage Rates Roughly Unchanged Versus Friday’s Low,” Mortgage News Daily, July 27, 2026.)
Nationally, list prices are falling faster than they have in nine years. Both existing-home sales (-2.4%) and pending homes sales (-5.4%) were down last month, but closed sales were up in June year-over-year (+2.8%). There is slightly more inventory on the market than a year ago (+1.3%) and slightly less than in May (-0.6%). (Source: “Latest Housing Statistics and Real Estate Market Trends,” National Association of REALTORS®, July 2026.)
Overall, the job market seems to continue to buoy the housing market despite the challenges of slower hiring, housing affordability, and mortgage rates.
The Texas Economy
During Q2 2026, Texas continued its growth trajectory with robust commercial banking, development of new data centers, and A.I. infrastructure. Job growth of 3.5% and stable unemployment at 4.4% in June 2026 also helped fuel this growth. Additionally, Texas is forecasted to increase jobs by a healthy 2.0% during 2026 (the historical long-term average for Texas), which would be an improvement over the almost flat job growth of 0.1% (+10,700 new jobs) seen in 2025. (Source: “Texas Employment Forecast,” Federal Reserve Bank of Dallas, July 17, 2026.)
The Texas housing market in 2026 has become a buyers market in many ways. The inventory is higher when compared to recent historical lows, which gives buyers more negotiating power, as does the flat-to-slumping home prices. We are also seeing more price reductions.
Home Prices. Mid-year, the median home price was flat at $345,000 from June 2025. This represents a slight increase of $10,100 (+3.0%) from $334,900 in March 2026.
Home Sales. Closed sales totaled 34,517 in June 2026, which represent a 7.2% increase from June 2025, and an increase of 4,824 (+16.25%) from 29,693 closed sales in March 2026.
Inventory. Months of inventory averaged 5.4 in June 2026, slightly down from 5.6 in June 2025 and up from 5.0 in March 2026. As a reminder, a balanced market between buyers and sellers is 6.0 months. Active listings increased by 0.2% to 154,103 in June 2026 year-over-year, and by 14,613 (+10.48%) from 139,490 in March 2026.
Velocity of Sales. It took an average 96 days to market and close a home in June 2026, which is 3 days longer than June 2025 and 14 days shorter than March 2026.
(Source: “June 2026 Texas Housing Report,” Metrotex, July 2026.)
DFW Residential Real Estate Sales
This year’s spring selling season in DFW has been more balanced and complex compared to last year. With more stabilized home prices and inventory greater than it was in recent years, buyer activity has translated into more closed sales, a slightly longer sales cycle, and more price reductions compared to last year, all indicators of a more balanced market.
Home Prices. The median home price in DFW is now at $399,999, which represents no increase from June 2025, and an increase of $14,999 (+3.9%) from $385,000 in March 2026.
Home Sales. Sales increased to 9,529, which is up by 6.5% from June 2025, and up by 1,300 closings (+15.67%) from 8,229 in March 2026.
Velocity of Sales. In June 2026, it took 88 days to close a sale, which is 3 days longer than June 2025 and 15 days shorter than March 2026.
Inventory. As of June 2026, there were 4.5 months of inventory on the market, up from 4.0 months of inventory in March 2026 and down from 5.6 in June 2025. Again, a balanced market between buyers and sellers is 6.0 months. June 2026 saw 35,134 listings on market, which is a decrease of 4.2% from June 2025, and an increase of 4,367 (+14.19%) from the 30,767 properties on the market in March 2026.
(Source: “June 2026 DFW Housing Report,” Metrotex, July 2026.)
The DFW housing market is now characterized by a split between the tighter, closer-in neighborhoods, and the outer suburban corridors, which are experiencing some price corrections, as the single-family housing market in the suburbs transitions to a healthier, more balanced market.
Commercial and Multifamily Market
The North Texas commercial and multifamily market continues to rebalance with slowing construction starts and more supply absorption. With vacancy falling to 8.3%, greater absorption, and easing supply, the industrial sector is well-balanced in terms of supply and demand. The retail sector is also considered healthy with low vacancy at 4.6% and low new supply in the pipeline. As the star, DFW office leasing jumped by 13% from last year thanks to job growth and corporate relocations across multiple sectors (Source: “Dallas-Fort Worth business news: Leasing jumps 13%,” Capital Analytics Associates, July 24, 2026.).
Over the past few years, the glut of new apartment deliveries in DFW has increased vacancies as developers used the lure of concessions to attract renters—these concessions are and were at times hefty, including weeks of free rent. The good news is that the absorption of these new deliveries elevated during Q2, increasing rents and occupancy to 93.8%. Of these new deliveries, the lion’s share were concentrated in submarkets like Frisco, Allen, and Denton; naturally, many retail and mixed-use expansion projects have followed the growth to the outer-ring suburbs. (Source: “Multifamily Q2 2026,” Colliers, July 2026.)
New-Home Construction
During Q2, the trend for decelerating new-home construction continued across Texas. Houston and San Antonio saw a notable decline in new residential construction permits, whereas Austin is the only major metro area in Texas that saw a year-to-year increase in new permits. The demand for new housing in Austin was driven by its technology sector and rapid population growth.
Continuing the tale of two markets, the Dallas Metro area experienced mixed momentum. Tarrant County saw a sizable increase in permits of 35% year-over-year, whereas Collin County had a comparable decrease. Overall, Dallas ranked second statewide for new residential construction permits. Interestingly, Dallas led the state mid-year in new permits (2,047) for higher-valued residential new construction (homes valued in excess of $500k). (Source: Carruth, Erika, “Texas Residential Construction Mid-Year Review: Q2 2026,” HBWeekly.com, July 22, 2026.)
Food for Thought
Are you noticing more traffic in North Texas? Well, for good reason.
With four of the largest 10 cities in the country, Texas has a population that topped 31.7 million in 2025, which represents a notable increase of 391,000 (+1.2%) from 2024. Fort Worth (pictured above) is now officially the 10th largest U.S. city with a population of roughly 1 million, and Dallas came in 9th on this list with a population of roughly 1.3 million.
With more than 1,000 new Texans added daily to our population, this impressive growth represents a slow-down from recent years. Many of these new Texans hail from, you guessed it, California, New York, and New Jersey.
The most rapid growth was seen in the suburbs outside of Dallas and Houston, which lost residents to the surrounding suburban counties. It is forecasted that the rings around the metropolitan triangle between DFW, Austin, San Antonio, and Houston will have the largest growth in the next few years, and new housing will be built to accommodate these burgeoning suburbs. (Source: Texas Demographic Center, “Texas Population: Trends and Characteristics,” Presentation delivered at TxDOT Commission Meeting, April 30, 2026.)
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