The Texas Housing Market Thaw:
Q1 2026 Market Update
After years of rate shock and market paralysis, we're witnessing the early stages of a genuine market shift. Buyers are re-engaging, sellers are stepping back in, and transaction volumes are climbing to multi-year highs. This isn't a boom—it's a normalization phase where skill, market knowledge, and expert guidance matter more than ever.
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Meet Your Texas Real Estate Expert
Robert Wallgren
JPAR Realty
Your dedicated Texas Real Estate expert serving North Texas and the Texas Hill Country.
281-536-6000
Texas Licensed Realtor #0834615
Hello! I'm Robert Wallgren, your dedicated Texas real estate expert with JPAR Realty. As a longtime resident who's helped hundreds of families find their perfect home here, I understand both the excitement and challenges of relocating to our vibrant Texas communities.
My deep connections with local builders, school administrators, and community leaders mean you'll have insider access to everything North Texas and the Hill Country offer. I'm committed to making your transition as smooth as possible, providing personalized service every step of the way.
Why Work With Robert Wallgren
Local Market Expertise
Deep knowledge of North Texas and Hill Country markets, neighborhood trends, and community insights
New Construction Specialist
Direct relationships with premier builders and access to upcoming developments before public release
Expert Negotiation Skills
Proven track record securing favorable terms and protecting your financial interests in every transaction
Comprehensive Transaction Management
White-glove service from initial search through closing, with meticulous attention to every detail
Professional Network Access
Connections to top lenders, inspectors, contractors, and service providers to support your journey
Objective Market Guidance
Data-driven advice and honest counsel to help you make informed decisions with confidence
Buyer Demand Surges as Rates Stabilize
The data tells a compelling story: buyers are returning to the market in significant numbers. Purchase mortgage applications rose both week-over-week and year-over-year in early 2026, signaling renewed confidence as rates hover near the psychological 6% threshold. This marks a dramatic shift from the rate-shocked paralysis that defined 2023-2025.
According to HousingWire's Housing Market Tracker, we've now recorded two consecutive weeks of double-digit year-over-year growth in purchase applications—an impressive 18% increase in the most recent week. Even more noteworthy, these gains come against much tougher comparisons than last year, when the baseline was exceptionally low. The momentum appears sustainable, with the market trending toward the critical goal of 12-14 consecutive weeks of growth.
Most importantly for buyers and sellers, these applications translate directly into closed transactions within 30-90 days, meaning spring 2026 is shaping up to be one of the strongest markets in years.
Purchase Application & Pending Sales Momentum
Record-Breaking Weekly Activity
Last week recorded the highest level of weekly pending home sales contracts in several years, with 56,252 pending sales compared to just 52,165 during the same week in 2025—representing nearly an 8% year-over-year increase.
This surge in pending contracts typically translates into closed sales within 30-60 days, positioning Q1 2026 as a potential turning point for the market. Both buyers and sellers are demonstrating increased confidence, creating the balanced market conditions necessary for healthy transactions.
Key Insight: We've achieved 2 straight weeks of positive week-over-week results with zero negative prints—a strong indicator of sustained momentum rather than temporary fluctuation.
Mortgage Rate Stability Drives Market Confidence
Despite global financial volatility—including dramatic events in Japan's bond market and international summit discussions in Davos—mortgage rates have remained remarkably stable throughout early 2026. Rates ended the most recent week at 6.19% according to Mortgage News Daily, with Polly's rate lock data showing weekend rates at 6.23%.
What's particularly encouraging is that similar bond market conditions in 2025 would have pushed rates to 6.30%-6.40%. The difference? Mortgage spreads have improved significantly, returning closer to their historical normal range of 1.60%-1.80%. Current spreads closed at 1.82%—far below the elevated levels of 2023.
To put this in perspective: if spreads matched 2023 peak levels, mortgage rates would be 1.29% higher at 7.48%. This normalization of spreads means rates can remain lower for longer, giving both buyers and sellers the confidence to transact.
Inventory Growth Signals Market Normalization
The supply side of the equation is also improving, with housing inventory growing steadily year-over-year. While the growth rate has moderated from the 33% peaks seen in mid-2025 to a current rate of 9.81%, this is actually a healthy sign—it indicates we're moving toward sustainable balance rather than dramatic oversupply.
Weekly inventory rose from 695,628 to 697,868 homes, compared to 632,076 to 635,529 during the same period last year. The key metric isn't the rate of growth, but rather that inventory continues expanding from current levels instead of contracting back to the severely constrained conditions of early 2022.
New listings data has been particularly encouraging in 2026. The most recent week saw 53,920 new listings compared to 50,946 the previous year—representing sustained growth. The goal for peak periods is reaching 80,000 new listings per week, a threshold that marks the low end of the typical healthy range of 80,000-100,000. For context, during normal pre-pandemic periods, new listings ranged from 250,000-400,000 weekly. We're not there yet, but we're moving in the right direction.
Price Adjustments Reflect Healthy Market Dynamics
Normal Market Behavior Returns
Approximately one-third of homes on the market are experiencing price reductions—33.60% in 2026 compared to 33% last year. This isn't a warning sign; it's actually an indicator of a healthy, functioning market where pricing discovery happens naturally.
In the overheated markets of 2020-2022, price cuts were virtually non-existent as buyers competed frantically for limited inventory. The return to normal adjustment patterns means sellers are pricing more realistically, buyers have room to negotiate, and transactions are happening at fair market values.
The critical question for 2026 is how supply and demand dynamics will respond to sustained rates near 6% rather than the 7%+ rates that dominated 2022-2025. Early indications suggest both sides are adapting well, creating transaction-friendly conditions.
33.6%
Price Reductions
Homes with price adjustments in 2026
9.81%
Inventory Growth
Year-over-year inventory increase
697K
Active Listings
Total homes available nationwide
Market Data Visualization: Q1 2026 Trends
Comprehensive market data from HousingWire, NAR, and leading industry sources shows consistent trends: purchase applications climbing, pending sales at multi-year highs, inventory growing steadily, and mortgage spreads normalizing. These visualizations represent real-time market conditions tracked weekly throughout Q1 2026.
What This Market Thaw Means for You
The Window of Opportunity
This isn't a boom market—it's something potentially better: a normalization phase where skill, follow-up, and market knowledge matter more than ever. The agents and clients who understand this shift first will have a significant competitive advantage.
For buyers, this means more inventory to choose from, reasonable negotiation opportunities, and stable financing conditions. For sellers, it means motivated buyers are actively searching, qualified and ready to move when they find the right property.
Whether you're looking to buy your first home in North Texas, upgrade to a larger property in the Hill Country, or sell to take advantage of improving market conditions, having an experienced local expert makes all the difference.
Ready to make your move? Contact Robert Wallgren today for a personalized consultation and discover how expert representation can maximize your success in this evolving market.