Looking into 2026

As we look ahead to 2026, many homeowners and buyers are wondering what the new year may bring for residential real estate. Will the market improve, slow down, or stay similar to 2025? And what about interest rates?

The good news is that mortgage rates are gradually moving downward, even if the progress is slow and somewhat unpredictable. The Federal Reserve lowered its benchmark rate in October 2025, and signs of a cooling job market are helping ease pressure on rates. 

Key Economic Factors to Watch:

• Slower economic growth: A cooling economy and higher unemployment increase the likelihood of rate cuts as the Federal Reserve works to support growth.

• Ongoing inflation: Inflation remains a concern, which may slow how quickly interest rates can come down.

• Federal spending and debt: Continued government borrowing can put upward pressure on interest rates, keeping them️ mortgage rates higher than many buyers would like.

Texas Statewide Outlook for 2025–2026

Texas is expected to continue outperforming the national economy, even as job growth slows from the rapid pace seen after the pandemic. The Dallas Fed projects job growth of about 1.3% in 2026, slightly higher than earlier estimates.

Much of this growth is being supported by strong energy prices and increased defense spending. Personal incomes across Texas are still projected to grow at a steady pace of around 5% per year through 2026.

Texas Metro Outlook 

Texas’s major metro areas are expected to see steady, balanced growth into 2026. Austin and Dallas–Fort Worth continue to benefit from strong job creation and ongoing corporate relocations, even as growth moderates. Houston’s economy remains stable, supported by healthcare, construction, and large future projects, while San Antonio’s market is gaining momentum with increased inventory and buyer activity. Overall, Texas metros are moving toward a healthier, more balanced market.

Texas Suburbs and Smaller Towns

Suburbs and smaller towns surrounding Texas’s six major metro areas are seeing the strongest growth. Families and businesses are drawn to these communities for their affordability, quality schools, and appealing small-town feel. Over the past five years, nearly 25% of the 9 million people added to the U.S. population have moved to Texas.

Refrences: 

Looking Ahead: What to Expect in 2026 Real Estate, Mark Sprauge, Independence Title,   

https://www.independencetitle.com/looking-ahead-what-to-expect-in-2026-real-estate/ Independence Title