In 2026, the Houston real estate market is moving away from the volatility of the early 2020s and into a phase best described as progressive normalization—a period where rates, pricing, and inventory behave within more predictable ranges.
That shift is already showing up locally. According to the Houston Association of Realtors, Greater Houston entered 2026 with single-family home sales up year-over-year, median prices holding relatively steady, and inventory expanding toward a more balanced 4.5-month supply. This combination signals a healthier, more navigable market environment for prepared buyers and sellers.
For clients in The Heights, Garden Oaks, Oak Forest, and the premium Katy and Cypress corridors, this stability restores planning leverage and rewards preparation over speculation.
The 2026 Rate Outlook: A Low-6% Environment
Mortgage rates are no longer anchored to historic lows, but they’ve stabilized enough to support confident decision-making. Most major forecasters expect 30-year fixed rates to remain within a relatively tight range throughout 2026:
- Fannie Mae projects rates settling near 5.9% by year-end.
- The Mortgage Bankers Association expects a baseline near 6.2% as housing supply continues to improve.
- Morgan Stanley anticipates rates could drift toward 5.75% by mid-2026 as long-term Treasury yields stabilize, bringing sidelined buyers back into the market.
The takeaway: 2026 isn’t about chasing rate drops. It’s about executing within a known window.
What This Means for Our Core Houston Neighborhoods
A national average rate never tells the full story of a specific block or subdivision. Here’s how we see conditions shaping up locally.
The Inner Loop and Close-In Neighborhoods
The Heights, Garden Oaks, and Oak Forest
Inventory, not interest rates, remains the primary driver in these neighborhoods.
- Quality continues to win. Move-in-ready homes in The Heights and Woodland Heights still attract strong demand, even at 6% rates, particularly when homes are well-priced and well-presented.
- Flight to quality. Buyers are increasingly favoring renovated ranch homes and new construction in Oak Forest and Garden Oaks to avoid unpredictable renovation costs.
- Refinance-first mindset. Many buyers are securing the right home now, with plans to refinance if rates drift closer to the mid-5% range.
Premium Suburbs
Broader Katy, Cypress, and the Energy Corridor
Leverage looks different outside the Inner Loop.
- Builder incentives matter. In master-planned communities like Cane Island and Bridgeland, builders are often offering permanent rate buydowns or meaningful closing cost assistance that can effectively lower a buyer’s true borrowing cost.
- More selection, more negotiating power. Inventory levels in parts of Katy and Cypress are approaching a balanced market, allowing buyers to negotiate inspections, pricing, and concessions more effectively than in recent years.
The Moore Real Estate Group Advantage
Success in 2026 isn’t about timing a perfect rate. It’s about understanding micro-market dynamics, contract strategy, and financing options that align with long-term goals.
As a boutique brokerage specializing in The Heights and northwest Houston neighborhoods, we combine financial insight with street-level data to help clients navigate pricing, leverage, and timing with clarity.
Our 2026 recommendation: If you find a home that fits your lifestyle in established neighborhoods like Shepherd Park Plaza or Cottage Grove, today’s stable rate environment supports moving before sidelined demand re-enters the market and competition intensifies.
Ready to Talk Strategy?
If you want a clear, data-driven look at how mortgage rates affect your buying power in a specific ZIP code, we should talk.
👉 Schedule a Strategy Call with The Moore Real Estate Group