The Austin real estate market on Tuesday, February 17, 2026 shows a clear story of normalization. Active residential listings now stand at 13,261, which is 12.2 percent higher than this same time last year. While that is well below the previous cycle high of 18,146 reached in June 2025, it confirms that supply remains elevated compared to early 2025 levels. Nearly half of all active listings, 48.9 percent, have had at least one price drop. That single number tells you a great deal about current leverage in the Austin housing market.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for February 17, 2026.
Breaking down supply further, 4,033 of the active listings are new construction and 9,228 are resale homes. Builders continue to carry a meaningful portion of inventory, and their pricing and incentive strategies are influencing resale sellers. When nearly one out of every two homes has reduced its price, buyers gain negotiating confidence. For sellers, this is a reminder that price alignment is critical in today’s Austin real estate forecast.
New listing activity is actually slower this year. From January through mid February, cumulative new listings total 5,865. That is down 25.0 percent year over year and 4.0 percent below the long term average. Fewer homeowners are choosing to list, even as inventory remains higher than last year. This creates a complex supply picture. Total active inventory is up year over year, but fresh supply entering the market is lower.
On the demand side, pending listings sit at 3,979, which is 2.4 percent higher than this same time in 2025. At first glance that looks encouraging. However, cumulative pending contracts from January through February total 4,796. That is down 27.2 percent year over year and nearly 20 percent below the long term average. In simple terms, the market is not absorbing homes as quickly as it did during stronger cycles.
The Activity Index, which measures demand relative to supply, is currently 23.1 percent compared to 24.7 percent last year. That is a 6.7 percent decline. In the resale segment alone, the Activity Index is 20.56 percent. Historically, readings between 20 and 25 percent signal a softening phase. Many submarkets are in what can best be described as contraction or buyer advantage conditions. This supports a cautious Austin housing forecast for the near term.
Another important leading indicator is the new listing to pending ratio. For the month, it stands at 0.64. For the year to date, it is 0.70 compared to a 25 year average of 0.82. When this ratio falls below the long term average, it means new supply is outpacing contract activity. Year to date, there have been 1,069 more new listings than pending contracts. That imbalance contributes to rising months of inventory.
Months of inventory now measures 4.71 compared to 4.12 one year ago, a 14.5 percent increase. In practical terms, if no new homes were listed, it would take nearly five months to sell through current inventory at the current sales pace. In the resale only segment, many cities fall into neutral or buyer advantage categories. A few pockets are approaching buyer control territory. This confirms that leverage has shifted meaningfully from the seller dominated conditions seen during the 2021 and early 2022 cycle peak.
Sales volume provides additional context. There were 1,756 homes sold in the most recent month. Cumulatively, 3,431 homes have sold from January through February. That is 11.4 percent lower than last year but still 3.5 percent above the long term average. When adjusted per 100,000 residents, sales are down 13.3 percent year over year and more than 26 percent below average. Per 1,000 Realtors, sales are down 5.2 percent year over year and 23.2 percent below average. The Austin real estate market is moving, but it is not moving fast.
Pricing trends reflect this shift. The average sold price in February is $561,592. The median sold price is $435,000. From the May 2022 peak of $550,000, the median has declined 20.91 percent, or roughly $115,000. The average price has dropped 17.65 percent from its peak. That is a significant correction, especially when considered alongside higher mortgage rates.
Interestingly, when comparing median prices to 36 months prior, the market is essentially flat at 0.00 percent. This suggests that much of the pandemic driven appreciation has been reversed in real terms. In fact, some segments are now back to pre pandemic pricing levels when adjusted for inflation. This aligns with a broader austin real estate forecast that calls for continued normalization rather than rapid reacceleration.
The high versus low price tier comparison shows divergence. The bottom 25th percentile experienced a 4.40 percent year over year price decline and a 5.84 percent drop in price per square foot. The top 25th percentile, by contrast, saw a 3.71 percent price increase and a modest 0.72 percent rise in price per square foot. Higher end buyers remain more resilient, while entry level affordability remains pressured.
The absorption rate, defined as sold divided by active listings, is 14.96 percent. The historical average is 31.54 percent. A reading under 20 percent signals a slower market favoring buyers. The Market Flow Score, which combines several turnover metrics into a 0 to 10 scale, is 3.21 compared to a historical average of 6.58. These efficiency metrics confirm that the Austin housing market is operating at a lower velocity.
Looking forward, if we assume that the median sold price of $435,000 represents a cyclical bottom and apply the 25 year compound annual appreciation rate of 4.648 percent, it would take approximately 64 months to return to the prior peak level of $551,755. That would place a recovery around May 2031. This projection is not a guarantee, but it provides perspective. Real estate cycles tend to normalize gradually.
For buyers, this austin market update signals opportunity through negotiation. Nearly half of listings have reduced price. Months of inventory favors patience and comparison shopping. For sellers, strategic pricing and presentation matter more than ever. Overpricing will likely result in extended days on market and eventual price reductions.
For investors, the key variables remain rent trends, financing costs, and long term demographic growth. The reset in median prices improves yield potential compared to peak valuations. For agents, understanding micro market differences is essential. Six cities are up year over year in median price, while twenty four are down. The Home Value Index shows 80 percent of cities still classified as overvalued relative to historical fundamentals, which suggests more normalization could occur in certain pockets.
The Austin real estate market is no longer driven by urgency or fear of missing out. It is driven by value alignment, affordability, and long term planning. This is what a maturing housing cycle looks like. The austin housing forecast points toward continued stabilization, slower turnover, and selective demand.
