Mary's Market Watch: Q3 2026
Executive Summary
The North Texas housing market has officially transitioned into a period of healthy stabilization, remaining a star on the national stage. This strong performance reflects and accentuates the broader economic growth across the country, with Texas leading the charge in job creation and Gross Domestic Product (GDP) expansion despite high interest rates.
In Other News
DFW Ranked #1 Market to Watch. Dallas-Fort Worth topped the list of U.S. real estate markets to watch for the third year in a row, according to the annual “Emerging Trends in Real Estate“ report by PricewaterhouseCoopers and Urban Land Institute. The report cited the region’s total investment and development as the primary drivers. It also highlighted the office market, industrial, and data center sectors, along with ‘mega-projects’—including major corporate hubs for Goldman Sachs and Morgan Stanley and the launch of the Texas Stock Exchange. (Source: Wooten, Nick, “D-FW named nation's hottest real estate market for third straight year. Here's why,” Dallas Morning News, October 27, 2026.)
Federal Reserve Holds Rates Steady. On October 28, the Federal Reserve (the Fed) opted to hold interest rates steady despite the persistent inflation that affects all areas of the economy. However, institutional analysts anticipate that the Fed will implement its second interest rate hike of the year at its upcoming December meeting.
U.S. Real Estate Market
The national existing-home sales market is currently experiencing a slowdown, characterized by price resilience and a decelerating selling cycle.
National Median Home Price: The national median single-family existing-home price rose 1.7% year-over-year to $432,900 during Q3, according to the National Association of REALTORS® (NAR). Home prices increased in 78% of metropolitan markets tracked by NAR. (Source: Tracey, Melissa Dittmann, “Home Prices Strengthen Across Most Metros in Q3,” NAR, October 29, 2026.)
Existing-Home Sales Volatility: Existing-home sales saw a modest monthly increase of 1.5% during September but fell by 2.2% year-over-year. (Source: “Existing-Home Sales Increased 1.5% in September, According to NAR Report,” NAR, October 13, 2026.)
Pending Home Sales Contraction: Pending home sales dropped by 7.3% month-over-month and experienced an 11.3% decline year-over-year. All four major U.S. geographic regions (Northeast, Midwest, South, and West) saw declines due to elevated mortgage rates.
According to NAR Chief Economist Dr. Lawrence Yun, while robust job growth and steady income gains typically buoy residential sales, overall housing affordability remains top of mind for many buyers. Limited inventory and inflation continue to keep home prices elevated, while mortgage rates exceeded the 7.0% threshold in late September — the first time in three years. (Source: “Pending Home Sales Decreased 7.3% in September,” NAR, October 20, 2026.)
The Texas Economy
The State of Texas continues to display economic resilience, outperforming the national averages in job creation and population growth—two key drivers that fuel the real estate market. However, Texas is not immune to the cooling effects of inflation and monetary policy.
Flat Home Prices: The median home price across Texas held steady at $329,900, representing no change (0.00%) compared to last year. This price reflects a minor dip from the summer peak of $345,000 in June, which is the traditional high point of the selling season.
Home Sales Contraction: Closed residential sales in Texas totaled 26,827 in September, representing a 4.8% decrease year-over-year. This reflects a notable decrease of 22.28% (7,690 fewer closings) compared to June, when closed sales peaked at 34,517.
Inventory Expansion: Texas housing inventory averaged 5.5 months of supply in September, up slightly from 5.4 months in June. Since 6.0 months represents a perfectly balanced market, the Texas housing market is hovering on the edge of a true equilibrium between buyers and sellers. Total active listings increased by 2.8% year-over-year to 154,788 homes, giving buyers more options than they have seen in practically 10 years.
Sales Velocity Slowdown: The average days on market (the total time required to market, contract, and close a residential property) rose to 102 days in September. This is an increase of six days from June and one day longer year-over-year, highlighting that buyers are taking longer to navigate their purchases.
(Source: “Sep. 2026 Texas Housing Report,” Metrotex, October 2026.)
DFW Residential Real Estate Sales
According to Q3 2026 data provided by the MetroTex Association of REALTORS® and the Texas Real Estate Research Center, the rapid changes that characterized the post-pandemic era have cooled into a steady equilibrium. Our local market is finding its footing. Home prices remain historically resilient—with the median sale price holding steady around $385,000 to $390,000. While the days of intense bidding wars are largely behind us, a more balanced landscape has emerged.
However, there is one curveball: high mortgage rates.
Home Prices: The median home price across the DFW metroplex settled at $379,990 in September. This represents a slight decrease of 1.6% year-over-year and a 5.0% ($20,009) drop from June, when the median price peaked at $399,999.
Home Sales on the Decline: Closed single-family home sales fell 6.6% year-over-year to 7,228 transactions in September. Mirroring the broader Texas trend, this also represents a notable 24.15% decline from June's total of 9,529 sales.
Inventory Stability: As of September 2026, there were 4.5 months of inventory on the market. This metric remained flat compared to June 2026 and was slightly down from the 4.6 months in September 2025. Again, a perfectly balanced market between buyers and sellers is 6.0 months.
Steady Sales Velocity: The velocity of sales remained steady, averaging 95 days to market and close a transaction in September. While this is one day faster than the previous year, it represents an increase of 7 days relative to June, when homes averaged 88 days from listing to close.
(Source: “Sep. 2026 DFW Housing Report,” Metrotex, October 2026.)
New-Home Construction
During Q3, the DFW new-home construction market contracted while adjusting to higher mortgage rates, rising labor and material costs (up 50% since 2020), and a slower sales cycle.
As a result, home builder sentiment has fallen to a 14-year low (Source: “Builder Sentiment Falls on Rising Rates,” National Association of Home Builders, October 19, 2026).
Fewer Home Starts and Sales: Housing starts in September decreased by 4.1% to 8,690 units year-over-year. Meanwhile, closings slowed by 8.6% to 10,015 completions over the same period.
Increased Supply: Finished vacant inventory increased to 10,628 units, which is a 3-month supply, while active listings averaged 129 days on the market. (Source: Franklin, Neal, “Homebuilding brief: Mortgage rate rise presents barriers for D-FW buyers,” Dallas Morning News, October 17, 2026.)
Sizable Market Share: New construction still maintains a significant share of the market with up to 31% of total area listings and sales (Source: “New Construction Makes Up Nearly One-Third of DFW Listings,” Metrotex, September 2, 2026.)
Related RE Markets: Commercial and Multifamily
The DFW commercial and multifamily real estate sectors had divergent performances during Q3. The industrial and retail sectors were clearly the star performers.
Industrial: With impressive demand for data centers and big-box spaces (like PepsiCo and Red Bull), North Texas experienced the second-best quarter ever for net absorption. (Source: “DFW Industrial Market Report | Q3 2026,” Colliers, October 28, 2026.)
Retail: Occupancy rates in the retail sector broke records, exceeding an average 95%, thanks in part to experiential mixed-use centers and luxury expansions. (Source: “Dallas Retail | Q3 2026 | Quarterly Market Report,” Partners Real Estate, October 19, 2026.)
Office Market: Still in recovery mode, this market is becoming more stable. While Q3 was characterized by highly localized performances, overall high vacancy rates fell to 24.6%. Premium spaces like Uptown, Preston Center, and Frisco are booming with strong absorption and rent increases. (Source: “Dallas/Fort Worth Office Figures Q3,” CBRE, October 9, 2026.)
Multifamily: This sector is actively rebalancing and recovering from a recent oversupply of product. Record-breaking progress continues to be made this year as a major swath of that historical oversupply is absorbed. During Q3 alone, 9,000+ units were absorbed, bringing the year-to-date total to 26,700 units.(Source: Matheny, Andrew, “Dallas Multifamily Marketbeat,” Cushman & Wakefield, October 2026.) All those new apartments are leasing up!
Food for Thought: Strategies for Buyers and Sellers
The DFW market has officially leveled out. Moving forward, elevated mortgage rates, persistent inflation, and shifting inventory levels are the key variables to watch. For buyers, sellers, and individual investors alike, navigating this climate requires realistic, hyper-local pricing strategy and a focus on current local data rather than broad national headlines.
For Residential Buyers
Leverage Increased Market Balance: With inventory levels holding at 4.5 months in DFW, you have more options and leverage than at any point during the last five years. Use the longer selling cycle to negotiate seller concessions, such as permanent interest rate buy-downs or comprehensive repair credits.
Focus on Your Specific Submarket: All real estate is local. While the DFW median home price dropped 1.6%, certain submarkets continue to see price increases based on local demand. Ground your offers in hyper-local comparable sales data from the past 60 days rather than older data or general market trends.
For Residential Sellers
Price for Today’s Market, Not Yesterday’s: Pricing your home based on what a neighbor’s home sold for 12 months ago can lead to extended days on market and price reductions. In this market, it is critical to price your property accurately from day one.
Prioritize Property Condition: In a market with a 2.8% year-over-year increase in active listings, buyers have alternatives. Properties that require capital improvements or deferred maintenance are quickly discounted by buyers. It is smart to address minor structural, mechanical, and cosmetic issues prior to marketing your home for sale.
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