The Austin real estate market enters Friday, February 06, 2026 in a clear cooling phase defined by elevated inventory, muted demand, and persistent pricing pressure across most segments of the market. Active residential listings currently sit at 12,987 homes, up 11.0 percent from the same time last year. While this level remains well below the prior cycle peak of 18,146 listings recorded in late June 2025, it still represents a materially higher supply environment than buyers and sellers were accustomed to during the post-pandemic years. Nearly half of all active listings, 49.5 percent, have already experienced at least one price reduction, reinforcing the reality that sellers are still adjusting to softer market conditions.
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From a supply perspective, resale homes continue to dominate the market, accounting for 8,936 of the 12,987 active listings, while new construction contributes 4,051 homes. Builders remain more active than historical norms, but even new construction is facing slower absorption and heavier incentive use. Inventory growth alone does not define market balance, but when combined with demand indicators, it paints a clear picture of a market that remains supply-heavy.
New listing activity provides further confirmation of demand hesitation. Cumulative new listings from January through early February total just 4,394 properties, down 43.8 percent year over year and 27.5 percent below the long-term average. Fewer sellers are choosing to list, often due to locked-in mortgage rates, but reduced new supply has not been enough to offset slowing buyer activity. Pending listings, which represent homes under contract, are only marginally higher than last year at 3,663, an increase of just 1.0 percent year over year. When supply rises faster than demand, pricing power erodes, and that dynamic remains firmly in place.
The cumulative pending total from January through early February stands at 3,477 homes, down 47.3 percent from last year and more than 41 percent below the historical average. This gap between new listings and pending contracts continues to widen, with a year-to-date difference of 917 more listings than pendings. The new listing to pending ratio for the year is 0.67, well below the 25-year average of 0.82. Historically, ratios below average indicate that inventory is accumulating faster than it is being absorbed, which typically leads to longer days on market and additional price adjustments.
The Activity Index reinforces this conclusion. The overall Activity Index currently sits at 22.0 percent, down from 23.7 percent last year. Resale activity is even weaker, with an Activity Index of 19.91 percent, placing much of the resale market firmly within the contraction zone. At these levels, buyer urgency is limited, showing behavior becomes selective, and sellers must compete aggressively on price, condition, and concessions. New construction performs better with an Activity Index of 26.24 percent, but even that reflects moderation compared to the highs seen earlier in the cycle.
Months of Inventory is now at 4.61 months, up 13.3 percent year over year. While this is not an extreme oversupply by historical standards, it clearly signals a buyer-advantaged environment. Resale-only months of inventory data shows a broad dispersion across the metro, with many cities moving into buyer advantage or buyer control territory. Austin proper records a slight year-over-year decline in months of inventory of 5.9 percent, but even with that improvement, inventory remains elevated relative to demand, preventing any meaningful price recovery.
Sales data confirms that transactions are occurring, but at a reduced pace. February recorded 1,837 closed sales, bringing the cumulative January through February total to 3,463 homes. That figure is down 10.6 percent year over year, though still 4.4 percent above the long-term average. On a per-capita basis, sales activity remains weak, with cumulative sales per 100,000 residents down 12.5 percent year over year and more than 25 percent below average. When adjusted for the growing number of licensed Realtors, sales per 1,000 agents are also well below historical norms, underscoring increased competition and thinner transaction volume for agents.
Pricing remains under pressure across most segments of the Austin housing market. The average sold price for February is $559,876, representing a 17.9 percent decline from the May 2022 peak of $681,939. Median sold price stands at $425,000, down 22.73 percent from the $550,000 peak reached in 2022. Median prices are now 2.3 percent below where they were 36 months ago, a clear signal that nominal price recovery has stalled.
Price performance varies significantly by price tier. The bottom 25th percentile of homes experienced a 5.15 percent decline in prices year over year, while the top 25th percentile posted a modest 0.78 percent increase. This split reflects a market where affordability constraints continue to weigh on entry-level and mid-range buyers, while higher-end segments benefit from stronger balance sheets and less rate sensitivity. Even so, appreciation remains uneven across the region, with only 7 cities posting year-over-year median price gains while 22 cities remain down.
The Home Value Index further highlights this imbalance. Eighty percent of cities are currently classified as overvalued, 20 percent as fairly valued, and just one city registers as undervalued. These classifications are based on long-term pricing relationships rather than short-term fluctuations, suggesting that even after recent declines, much of the Austin metro has not fully realigned with historical norms.
Demand relative to supply remains muted. The absorption rate, defined as the ratio of sold listings to active listings, currently sits at 14.7 percent, well below the historical average of 31.54 percent. This low absorption rate confirms that inventory is turning slowly, reinforcing buyer leverage and limiting sellers’ ability to command premium pricing.
The Market Flow Score provides a composite view of market efficiency by combining multiple turnover metrics into a single index. Today’s Market Flow Score is 3.05, compared to a historical average of 6.58. Scores at this level indicate a sluggish market with excess supply, slower turnover, and limited momentum. While this does not suggest a market collapse, it does confirm that Austin remains in a prolonged normalization phase rather than an active recovery.
Looking ahead, long-term projections provide useful context. Using the Austin market’s 25-year compound annual appreciation rate of 4.554 percent, and assuming the current median sold price of $425,000 represents a cyclical bottom, it would take approximately 71 months, or until December 2031, for median prices to return to prior peak levels near $550,631. This projection assumes stable economic conditions and long-term growth trends, but it highlights the reality that price recovery is measured in years, not months.
For buyers, today’s Austin housing market offers leverage, selection, and negotiating power rarely seen over the past decade. For sellers, success requires realistic pricing, strong presentation, and a willingness to adjust quickly based on market feedback. Investors must remain disciplined, focusing on cash flow, long-term fundamentals, and conservative assumptions. For real estate agents, the data underscores the importance of pricing accuracy, local market expertise, and clear communication grounded in real numbers rather than past expectations.
The Austin real estate market continues to reset toward sustainable fundamentals. Inventory remains elevated, demand is cautious, and pricing pressure persists, but the market is functioning, transactions are occurring, and long-term growth drivers remain intact. This is a market defined by patience, precision, and preparation rather than urgency or speculation.
