Houston’s housing market has not stopped moving—but buyers have clearly taken their foot off the gas.
During the week ending October 5, pending home sales across Greater Houston fell 23% compared with the same week last year. At the same time, the national average 30-year conventional mortgage rate climbed to 7.40%.
Together, those numbers tell the real story of today’s market: buyers have more negotiating power, but substantially less purchasing power.
For sellers, simply putting a home on the market and waiting is no longer a strategy. For buyers, getting a discount does not necessarily create an affordable payment. And for Veterans experiencing mortgage trouble, an important new VA foreclosure-prevention program is becoming operational.
Here is what Greater Houston homeowners and homebuyers need to know.
Houston’s Pending Home Sales Are Down 23%
According to the latest Houston Association of REALTORS® Weekly Activity Snapshot, Greater Houston recorded the following activity during the week ending October 5:
New Listings
3,530
−3% YoY
Pending Sales
1,661
−23% YoY
Closed Sales
2,037
−1.5% YoY
Showing Activity
−5.5%
YoY decline
Open Houses
−6.8%
YoY decline
HAR.com Listing Views
−16.8%
YoY decline
The decline in pending contracts is especially significant because pending sales are an early indicator of future closings. Closed transactions largely reflect purchase decisions made several weeks earlier.
This was also the second consecutive week in which pending sales declined by approximately 23%. That suggests the slowdown is more than a single unusual week.
However, this does not mean Houston home prices are about to collapse.
HAR’s latest complete monthly report, covering August, showed 5.3 months of single-family inventory and a median price of $330,000—only 1.5% below the prior year. Houston has more inventory and fewer active buyers, but many homeowners still have substantial equity and low existing mortgage rates. Most are not being forced to sell at deeply discounted prices.
What this means for Houston sellers
Buyers are still purchasing homes, but they have enough choices to reject properties that are overpriced, poorly presented or expensive to insure and maintain.
Sellers should be prepared to compete on more than price. Buyers are comparing:
Your home does not necessarily need to be the cheapest property available. It does need to present a compelling value compared with everything else the buyer can purchase.
The first two weeks of a listing are crucial. Waiting six weeks and then making a small price adjustment may not undo the damage caused by an overpriced launch.
What this means for Houston buyers
The decline in pending sales creates genuine negotiating opportunities, but buyers should negotiate for the benefit they need most.
Depending on the buyer’s financial situation, that might mean:
A $10,000 price reduction is not automatically better than a $10,000 seller credit. The lender should model both options before the buyer writes the offer.
Mortgage Rates Have Jumped to 7.40%
Freddie Mac reported that the national average 30-year conventional fixed mortgage rate reached 7.40% on October 8. That is up from 6.76% on September 10.
These are national conventional averages—not guaranteed rates and not specific VA loan quotes—but they show how quickly the financing environment has changed.
$400,000 Loan — 30-Year Fixed
At 6.76% (Sept 10)
$2,596
P&I / month
At 7.40% (Oct 8)
$2,770
P&I / month
Increase
+$174
Per month
Before property taxes, homeowners insurance, flood or wind coverage, HOA dues or a financed VA funding fee.
Buyers who received a preapproval several weeks ago should not assume their original price range still produces a comfortable payment.
Should buyers wait for rates to fall?
No one can reliably predict short-term mortgage rates.
Waiting could bring a lower rate—but it could also bring a higher one, less seller flexibility or different inventory. The better question is whether a buyer can comfortably afford the right property under today’s terms.
A home purchase should work at the permanent note rate. A temporary buydown can provide short-term breathing room, but it should not be used to hide a future payment the buyer cannot afford.
Houston Is Not One Housing Market
Metro-wide statistics are helpful, but they do not tell buyers or sellers what is happening in a specific community.
Recent HAR market-area snapshots show significant differences:
That is the difference between a relatively balanced market and one that strongly favors buyers.
Property type matters, too. Detached homes, townhomes, condominiums, coastal properties and new construction can behave very differently—even when they are located within the same ZIP code.
Metro statistics tell us the weather. Neighborhood and property-level data tell us whether we need an umbrella.
Before establishing a price or negotiation strategy, buyers and sellers should examine:
Builder Incentives Are Putting Pressure on Resale Sellers
As mortgage rates rise, builder financing and flex-dollar promotions become more valuable.
One current Houston-area builder promotion offers qualifying buyers flex dollars equal to 7% of the home’s base price, up to $40,000, on select properties purchased by October 18. The financing portion is subject to a separate maximum and additional program requirements.
That does not mean every buyer automatically receives $40,000 in cash. Builder incentives may be limited to designated homes, financing costs, upgrades or closing expenses. They may also require the use of an affiliated lender and a specific closing date.
Before accepting a builder’s offer, buyers should request:
Resale sellers in Katy, Cypress, Fulshear, Richmond, Hockley and Montgomery County are not competing only with other resale homes. They may also be competing with brand-new homes offering tens of thousands of dollars in incentives.
Property Taxes and Insurance Can Change the Payment
Harris County has adopted a combined county-controlled tax rate of approximately $0.67 per $100 of taxable value, which is 7.6% higher than last year’s rate.
That does not mean every homeowner’s complete property-tax bill will increase by 7.6%. The final bill depends on:
Buyers should never use the seller’s current tax bill as a guaranteed projection. The seller may have a homestead cap, over-65 exemption, disability exemption, disabled-Veteran exemption or much lower historical taxable value.
There is also encouraging—but property-specific—insurance news.
The Texas Department of Insurance reported that most homeowners insurance companies filing rate changes since July proposed decreases. TDI also clarified that an insurer cannot decline or nonrenew a policy solely because of the age of the house or roof.
That does not make an older roof irrelevant. Insurers may still consider its actual condition, construction, claims exposure and expected remaining life.
Buyers should obtain an address-specific insurance quote during the option period, not after the appraisal or immediately before closing.
New VA Help for Veterans Behind on Their Mortgages
The Department of Veterans Affairs is implementing a new Partial Claim Program and revised loss-mitigation process for eligible VA borrowers experiencing financial hardship.
The program is designed to help certain delinquent Veteran homeowners address qualifying missed payments and resume a sustainable regular mortgage payment. Mortgage servicers must fully implement the new process by November 28, 2026.
A partial claim is not free money, and it does not automatically forgive missed payments. Qualifying arrearages may be moved into a separate subordinate obligation that becomes repayable under specific circumstances, such as selling or paying off the property.
Veteran homeowners experiencing mortgage difficulty should:
- 1Contact their mortgage servicer immediately.
- 2Request evaluation under VA’s current loss-mitigation waterfall.
- 3Specifically ask whether the VA Partial Claim Program may apply.
- 4Document every conversation.
- 5Request proposed terms in writing.
- 6Contact VA’s Home Loan program at 877-827-3702 for additional assistance.
Beware of foreclosure-rescue scams
Warning signs include companies that:
- Demand advance fees
- Guarantee approval
- Instruct homeowners to stop communicating with their servicer
- Request payment through gift cards, cryptocurrency or a personal account
The Bottom Line
Houston buyers have leverage, but affordability remains the gatekeeper.
Sellers can still achieve strong results, but they must price and present their homes for the market that exists today—not the one they remember from several years ago.
The most important questions are no longer simply:
What is the asking price?
How much will the seller accept?
What did the house next door sell for?
Today, buyers and sellers also need to ask:
If you are considering buying or selling anywhere in Greater Houston—from Galveston to Trinity—MAD Properties Group can help you evaluate the complete transaction, not just the headline price.
Contact MAD Properties Group for a Property-Specific Market and Payment Analysis
Before making your next move, get a real conversation about your specific property, your neighborhood, and your complete monthly payment—not just the headline price.
Melanie Dubendorff | Broker Associate
REALTOR®, AWREP, MRP, VA Loan Certified, ABR, CNE, AHWD, ALHS, RENE, NHSAC
MAD Properties Group | Keller Williams Signature | TX License #514494-B
Serving Greater Houston — Galveston to Trinity
Market information is current as of October 12, 2026. Mortgage, tax, insurance and VA program information is general and should not be treated as lending, tax, insurance or legal advice.