Texas housing market

Texas shows up on nearly every "best state to buy a house" list, and every real estate investing thread, for the same two reasons: no state income tax, and prices below the coasts. Neither claim is false. Neither one tells you what your actual monthly payment looks like once property tax, insurance, and today's mortgage rate are added in.

This page walks through where Texas prices actually stand right now, what a buyer's market means for your negotiating position, what it takes to afford a home here on a real income, and where the investor math does and doesn't hold up. Jump to whichever section answers your question — city-level figures below are sourced individually, and Texas-specific numbers were last checked June 30, 2026.

Texas housing market snapshot

Texas's four major metros are moving in different directions rather than as one market. San Antonio's median sits at $295,000, Houston at $320,000, Fort Worth at $325,000, and Dallas at $390,000, based on Zillow ZHVI and Redfin data used in PropertyPundit's Texas investor analysis (June 30, 2026). Austin has fallen the furthest of any major Texas metro: prices are down roughly 4.6% over the past year to a metro median near $450,000, after peaking above $550,000 in 2022.

Supply is the story behind those numbers. Houston's apartment vacancy ran 19.5% in early 2026 and Dallas's 18%, both well above the roughly 7% national norm, while Austin's vacancy sat at 16.7% (Zillow Research, May 2026) — a hangover from the apartment construction boom of 2021 to 2023. So what for you: if you're buying anywhere in Texas right now, you're very likely negotiating in a market that favors you on price and terms, not one where you need to rush an offer to beat other bidders.

Is Texas a buyer's or seller's market?

Statewide, Texas is classified as a buyer's market, with days on market running around 68 — well above the 40-to-45-day range that marks a balanced market (Redfin, Zillow, NAR state-level data). In practice that means sellers are more likely to accept an offer below asking, cover part of your closing costs, or fix issues found in inspection rather than let a deal fall through, because they know the next offer might take weeks to arrive rather than days.

Austin is the clearest example: a metro that had buyers competing in bidding wars three years ago now has sellers competing for buyers, with prices down 4.6% and rents down roughly 20% from their 2022 peak. So what for you: if you've been holding off because you're worried about overpaying or getting outbid, that fear is far less justified in today's Texas than it would be in a tight coastal market — you have more room to ask for what you actually want.

Can you actually afford a home in Texas?

Take San Antonio, the most attainable of the four major metros, at its $295,000 median. With 10% down and today's 6.58% national rate (Freddie Mac PMMS, July 23, 2026), principal, interest, taxes, insurance, and PMI run approximately $2,597 a month once Bexar County's 2.27% property tax rate is included. Using the standard 28% front-end affordability rule, that requires roughly $111,300 in household income — well above the $79,721 median household income for Texas (U.S. Census Bureau, 2024 American Community Survey). Put an FHA loan at 3.5% down on the same house instead and the monthly payment rises to around $2,799, since a smaller down payment means a bigger loan and more PMI.

That gap between what San Antonio requires and what a typical Texas household earns is exactly why property tax matters as much as price here — it's a bigger share of your payment than in most states. So what for you: the math says most Texas households can't comfortably afford the state's largest metros without a second income, a lower purchase price, or a specific down payment assistance program — which is exactly why the state's mid-size metros and military-adjacent suburbs are where realistic entry points actually sit.

Texas cities to watch

San Antonio is the most affordable of the big four, anchored by Joint Base San Antonio, the largest military complex in the world by population, which keeps rental demand steady even when the broader market cools.

Houston is the state's largest and most economically diverse metro — energy, healthcare, and the Port of Houston all contribute — but it's also carrying the heaviest apartment oversupply of the four, which is holding rents down.

Dallas-Fort Worth splits into two distinct markets: Dallas is the priciest of the group at $390,000, driven by ongoing corporate relocations, while Fort Worth remains meaningfully cheaper at $325,000 for a similar commute radius.

Austin is the correction story of the group — down 4.6% year over year with the state's highest vacancy rate — which makes it either the best negotiating opportunity in Texas or a market still working through oversupply, depending on your time horizon. So what for you: whichever Texas city you're watching, check its current vacancy and days-on-market before assuming last year's headlines still apply — Austin's cooling and Houston's oversupply are recent developments, not old news.

Rent vs buy in Texas

In San Antonio, the market where the numbers work best for buyers, average rent for a 3-bedroom single-family home runs about $1,295 a month (Zillow ZORI, June 2026), against a buy payment of roughly $2,597 a month at 10% down. That's a gap of about $1,300 a month in renting's favor on a pure cash comparison — a wider spread than in most states, largely because of Texas's property tax load.

That doesn't automatically make renting the right call. Buying locks in your monthly cost against future rent increases and starts building equity, and Texas's lack of income tax means more of every raise you get stays in your pocket to put toward a mortgage. So what for you: if you can genuinely picture staying in the same home for seven-plus years, run your own numbers in our rent vs buy calculator — the case for buying strengthens faster than the raw monthly comparison suggests once modest appreciation is factored in.

First-time buyers in Texas

Texas's biggest advantage for a first-time buyer isn't the headline price — it's take-home pay. Zero state income tax means more of your paycheck is available for a mortgage payment than in a comparable-income state with a 4% to 5% income tax. The catch is the property tax bill, which is fixed to your home's value regardless of your income, so it deserves its own line in your budget rather than getting bundled into a rough "monthly payment" guess.

Nationally, 2,679 active down payment assistance programs were available as of Q1 2026, averaging an $18,000 benefit, and Texas has several state and city-level programs of its own in San Antonio and Fort Worth. So what for you: if a 20% down payment has been the thing keeping you on the sidelines, that's the myth worth unlearning first — and before you pick a city, our Dallas vs San Antonio breakdown shows exactly how far a given income stretches in each.

Real estate investors in Texas

Texas's zero income tax is real, but it doesn't show up anywhere in a DSCR calculation, which is based on gross rent, not net taxable income. At 25% down and 6.49% financing, San Antonio's property tax alone pushes DSCR to 0.59 and monthly cash flow to roughly negative $885 — and every other major Texas metro fails to cash flow as well. The one setup that gets close to breakeven is a sub-$190,000 purchase near a military installation such as Joint Base San Antonio, Dyess AFB in Abilene, or Goodfellow AFB in San Angelo, and even that requires 30% down.

The math points toward treating most of Texas as a long-hold appreciation play right now rather than a cash-flow investment. If you need a property to cover its own costs from month one, the honest answer is that almost nowhere in Texas does that at today's rates — see our full Texas investor cash flow breakdown for the county-by-county numbers, and our DSCR loan guide for how lenders actually evaluate a deal like this.