The Austin real estate market entering January 2026 is defined by one clear theme: supply remains meaningfully higher than demand, even as inventory has retreated from last summer’s peak. Active residential listings currently sit at 12,578 homes, well below the June 2025 high of 18,146 but still 14.9 percent higher than this time last year. This places the market firmly in a slower, more competitive environment for sellers and a more selective one for buyers. While the sharp inventory surge of mid-2025 has eased, the overall level of available homes remains elevated enough to keep pricing power constrained across much of the metro.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for January 08, 2026.
One of the clearest signs of this pressure is pricing behavior. Today, 54.5 percent of all active listings across the Austin area have experienced at least one price reduction. That is more than half the market actively adjusting expectations to meet current demand. This pattern reflects a broad recalibration rather than isolated weakness, and it reinforces the reality that buyers are price-sensitive and unwilling to chase listings that are not aligned with recent comparable sales.
Breaking inventory down further, resale homes account for 8,637 active listings, while new construction represents 3,941 homes. New construction continues to carry higher activity than resale, but even builders are operating in a more competitive environment than in prior years. Incentives and pricing flexibility remain common tools, especially in communities with overlapping supply. For resale sellers, the data suggests that accurate pricing at launch remains critical, as delayed adjustments often lead to extended market time and multiple price drops.
Pending listings offer additional insight into demand conditions. Currently, there are 3,023 homes under contract, which is 7.9 percent lower than the same point last year. This decline confirms that buyer activity has softened relative to 2025, even though mortgage rates and affordability pressures have stabilized compared to prior years. When demand slows while inventory remains elevated, market leverage naturally shifts toward buyers.
That shift is clearly visible in the Activity Index, which measures the percentage of active listings that are going under contract. The overall Activity Index has declined from 23.1 percent last year to 19.4 percent today, a 16.0 percent drop year over year. New construction continues to outperform resale with an Activity Index of 24.23 percent, while resale homes sit at a weaker 16.95 percent. From a market phase perspective, most resale areas now fall within contraction or near-crisis thresholds, where supply imbalances begin to drive price compression and longer selling timelines.
The New Listing to Pending Ratio reinforces this imbalance. For the year to date, the ratio stands at 0.43, dramatically below the 25-year average of 0.82. Historically, a ratio near 0.82 indicates a market where new supply and buyer absorption are relatively balanced. Today’s reading signals that new listings are far outpacing contract activity, which is consistent with the elevated inventory and slower turnover observed across the region. Year to date, there are 320 more new listings than pending contracts, underscoring the supply overhang that continues to define the Austin housing market.
Months of Inventory further confirms this shift. Overall months of inventory have risen from 3.83 last year to 4.46 today, an increase of 16.6 percent. While this level does not yet reflect extreme oversupply, it firmly places the market outside of seller-driven conditions. When focusing only on resale inventory, a growing share of cities now fall into buyer-advantage or buyer-control categories, where listings require longer exposure and price concessions become more common.
Despite softer demand, closings continue to occur at a steady pace. In January, 1,789 homes sold across the Austin area. The average sold price for the month was $584,806, down 14.24 percent from the May 2022 peak of $681,939. The median sold price tells an even clearer story, currently at $449,000, representing an 18.36 percent decline from the $550,000 peak reached in 2022. These declines illustrate how the market has been correcting gradually rather than abruptly, driven by affordability constraints and higher inventory rather than forced selling.
When comparing current median prices to those from 36 months ago, prices are down just 0.21 percent, effectively flat over a three-year window. This highlights how the rapid appreciation of 2020 through 2022 has largely been unwound, returning prices closer to trend rather than collapsing outright. Over the long term, Austin’s 25-year compound appreciation rate remains 4.776 percent, which provides important context for long-range forecasts.
Using that historical growth rate, if the market were to have reached a pricing bottom near today’s median of $449,000, it would take approximately 54 months, or until mid-2030, to return to a prior peak value near $551,733. This projection assumes normalized growth rather than speculative acceleration, which aligns more closely with current supply and affordability realities.
Price performance also varies by segment. Over the past year, the bottom 25th percentile of homes saw prices decline by 4.55 percent, while the top 25th percentile experienced a modest 1.59 percent increase. This divergence suggests that higher-end homes have been more resilient, while entry-level and mid-range segments continue to absorb the brunt of affordability pressure and inventory competition.
At the city level, price trends skew negative. Only six cities posted year-over-year median price increases, while twenty-four experienced declines. This broad-based softness confirms that the current correction is regional rather than isolated, affecting most submarkets across the Austin metro.
The absorption rate, defined as the ratio of sold listings to active listings, currently stands at 23.32 percent. This is well below the historical average of 31.61 percent and indicates a slower-moving market where a smaller share of inventory is being absorbed each period. While not indicative of a frozen market, it reinforces that buyers hold more leverage and can be selective.
Interestingly, the Market Flow Score currently measures 8.55, above its historical average of 6.59. This suggests that while demand is lower relative to supply, transactions that do occur are moving through the system with reasonable efficiency. In practical terms, properly priced homes are still selling, but mispriced listings are being left behind.
For buyers, today’s Austin housing market offers expanded choice, negotiating leverage, and reduced urgency. Price reductions, elevated inventory, and slower absorption create opportunities to negotiate both price and terms. For sellers, success depends heavily on pricing accuracy, presentation, and an understanding that today’s buyers have alternatives. For investors, the market increasingly rewards patience, disciplined underwriting, and a long-term view rather than short-term appreciation assumptions. For real estate agents, data-driven guidance and realistic expectations are more critical than at any point in the past cycle.
Taken together, today’s Austin real estate update shows a market that is no longer accelerating, not collapsing, but rebalancing. Supply remains elevated, demand is selective, and pricing is adjusting accordingly. This environment favors strategy over speculation and preparation over urgency.
