Austin Real Estate Market Update

Austin Real Estate Market Update – January 15, 2026

As of Thursday, January 15, 2026, active residential listings across the Austin area stand at 12,664 homes, representing a 13.5 percent increase compared to the same time last year. While inventory has declined from the prior peak of 18,146 listings reached in late June 2025, today’s supply level remains historically elevated and well above demand. More than half of all active listings, specifically 53.3 percent, have already experienced at least one price reduction, which confirms that sellers are being forced to react to slower buyer activity rather than lead the market.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for Thursday, January 15, 2026.

This is a very different environment than what buyers and sellers experienced during the pandemic surge. Even though inventory has pulled back from its peak, the market has not returned to balance. Instead, it has settled into a prolonged adjustment phase where listings are accumulating faster than they are being absorbed. Of the current inventory, 3,919 homes are new construction while 8,745 are resale properties. That breakdown matters because new construction continues to post stronger activity than resale, which is skewing overall market metrics and masking deeper weakness in the resale segment.

Pending listings tell a clearer story about demand. There are currently 3,223 homes under contract, which is down 4.7 percent year over year. New construction accounts for 1,366 of those pending homes, while resale properties make up 1,857. Despite builders offering aggressive incentives, overall buyer activity remains muted, particularly in the resale market where affordability constraints are most visible.

The Activity Index, which measures how much of the active inventory is converting to pending status, sits at 20.3 percent. This is down from 23.3 percent last year, marking a 12.8 percent decline in market engagement. When broken apart, new construction shows an Activity Index of 25.85 percent, while resale properties lag at just 17.52 percent. That places a large portion of the resale market firmly in contraction territory, where listings linger, sellers lose leverage, and price pressure increases.

Market phase data reinforces this point. A significant share of resale listings now fall into the contraction or danger zone and crisis or freeze categories, where Activity Index readings drop below 20 percent. These are conditions associated with stalled sales, rising supply imbalances, and accelerating price corrections. Very few resale markets remain in equilibrium, and virtually none qualify as expansion environments where demand clearly outpaces supply.

New listing behavior further confirms the imbalance. The monthly new listing to pending ratio currently stands at 0.54, meaning there are far fewer homes going under contract than coming onto the market. This ratio is well below the 25 year historical average of 0.82 and signals persistent excess supply. On a year to date basis, new listings exceed pending listings by 549 homes, which indicates that inventory pressure is still building despite seasonal slowdowns.

Months of Inventory provides one of the clearest signals of where the Austin housing market stands today. Overall months of inventory has increased from 3.90 last year to 4.49 today, a 15.1 percent rise year over year. While this does not yet reflect an extreme buyer controlled market at the headline level, resale specific data paints a more concerning picture. A growing share of resale inventory now sits in buyer advantage or buyer control categories, where excess supply leads to declining prices and extended marketing times.

Price behavior confirms what supply and demand metrics suggest. The average sold price in January is $598,068, down from the May 2022 peak of $681,939. That represents a 12.3 percent decline, or roughly $84,000, from peak pricing. Median prices show even more pronounced weakness. The median sold price is now $440,000, down from a peak of $550,000 in May 2022. This 20 percent correction reflects mounting pressure on middle market and entry level buyers, where affordability is most strained.

When compared to pricing from 36 months ago, the median sold price remains down 2.21 percent, confirming that the market has not yet stabilized into a clear recovery phase. Higher priced homes have shown relative resilience, with the top 25th percentile posting a modest year over year price increase of 4.01 percent. However, even in that segment, price per square foot has declined. Meanwhile, the bottom 25th percentile continues to weaken, with prices down 3.55 percent and price per square foot down nearly 5 percent. This divergence highlights how affordability pressures are disproportionately impacting lower priced homes.

Sales volume trends further validate the slowdown. A total of 1,819 homes have sold so far this year, and cumulative sold units per 100,000 residents stand at 68. That figure is down 5.4 percent year over year and nearly 15 percent below the long term average. Even though sales per 1,000 Realtors have increased slightly year over year, they remain below historical norms, underscoring how crowded the market has become for agents competing over fewer transactions.

The absorption rate, also known as the sold to active ratio, currently sits at 23.58 percent. This is well below the historical average of 31.61 percent and confirms that inventory is moving more slowly than normal. Lower absorption rates typically align with softer pricing, longer days on market, and increased seller concessions.

One metric that stands out as a partial offset is the Market Flow Score, which currently reads 8.57 compared to a historical average of 6.59. This score measures turnover efficiency rather than pricing strength, meaning homes that are priced correctly are still selling. The takeaway is not that the market is strong, but that it is selective. Buyers are active, but only when value is clear and pricing aligns with current conditions.

Looking forward, long term appreciation expectations remain modest. Using the Austin market’s 25 year compound appreciation rate of 4.694 percent, even if prices have already reached a cyclical bottom at a median of $440,000, it would take approximately five years, until late 2030, to regain prior peak values near $551,000. This projection assumes steady appreciation and no additional economic shocks, making it a best case normalization scenario rather than a guarantee.

For buyers, the Austin housing market now offers leverage, selection, and negotiating power that have not existed in years. For sellers, pricing discipline and realism are critical. Overpricing is no longer forgiven by momentum. For investors, the data continues to point toward patience, cash flow analysis, and selective entry rather than broad speculation. For agents, the market demands education, data fluency, and honest conversations grounded in measurable trends rather than optimism.

This Austin market update makes one thing clear. The market is not frozen, but it is no longer forgiving. Supply has the upper hand, demand remains selective, and price discovery is still underway.

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FAQ Section

Is the Austin housing market declining in 2026?

The Austin housing market is not collapsing, but it is clearly correcting. Median home prices are down 20 percent from their 2022 peak, and inventory remains elevated compared to demand. Over half of all active listings have already reduced their price, which signals ongoing adjustment rather than stabilization. This phase reflects normalization after an unsustainable surge, not a sudden downturn.

Is Austin a buyer’s market right now?

For resale homes, conditions are increasingly favorable for buyers. Months of Inventory has risen to 4.49 overall, and many resale markets are already in buyer advantage or buyer control territory. Buyers now have time, leverage, and negotiating power that did not exist in prior years. However, new construction behaves differently and often skews market wide averages.

Why are so many Austin homes reducing prices?

Price reductions are driven by excess supply and slower absorption. With 53.3 percent of listings showing at least one price drop, sellers are reacting to reduced buyer urgency and affordability constraints. Higher mortgage rates and elevated home prices have limited buyer capacity, forcing sellers to adjust expectations. This is typical behavior in a market correction phase.

Will Austin home prices recover soon?

Long term appreciation remains intact, but recovery will be slow. Based on historical compound appreciation of 4.694 percent, returning to prior peak median prices could take until around 2030, even if the market has already bottomed. This assumes steady economic conditions and no additional shocks. Short term price volatility should still be expected.

What does the Activity Index tell us about demand?

The Activity Index measures how much of the active inventory is going under contract. At 20.3 percent overall and just 17.52 percent for resale homes, demand is clearly weaker than last year. This places much of the market in contraction territory, where listings take longer to sell and pricing pressure increases. It is a clear signal that supply currently exceeds demand.

Have a Question or Want to Dive Deeper?

If you’d like a custom breakdown of the data, want help interpreting today’s market trends, or just have a question about buying or selling in Austin, let us know. Fill out the form below and a member of our team will get back to you promptly.