Houston Real Estate Market 2026: What 30,000 Homes for Sale Means for Investors

Houston is the fourth-largest city in the United States. The economy is diversified: energy, healthcare, aerospace, the Port of Houston. The population is 7.3 million. By almost every long-term metric, Houston has structural advantages.

And yet PropertyIQ scores Houston a 32 out of 100 as of February 28, 2026.

The score is not a judgment on Houston's long-term fundamentals. It is a snapshot of where the market stands right now -- specifically the balance between supply and demand. Here is what is driving a score of 32.

Inventory Is Massive

There are 30,462 homes listed for sale in the Houston metro as of February 2026. That is up 14.3% year over year. To put that in perspective: Rochester, NY -- which scores a 99 -- has 573 homes for sale. Houston has 53 times as many listings despite being a larger market, but the ratio reveals the imbalance.

Demand Is Not Keeping Pace

Houston's demand score is 0 out of 100 as of February 2026 -- the lowest possible reading on the index. The pending ratio is 0.30, meaning for every three active listings, only one is going under contract.

Prices Are Declining

Home values in Houston are down 2.23% year over year as of February 2026. The median listing price is $349,999.

18.4% of listings have had price cuts as of February 2026. Sellers are adjusting to meet a market with more supply than demand.

The Upside Case

Houston is only 7.4% overvalued relative to local fundamentals as of February 2026 -- relatively modest compared to Austin at 22.8%. The median household income is $80,458 (2023 Census). Zillow forecasts near-term home value growth of 0.9% as of December 2025 -- flat, not collapsing.

For investors, Houston right now is a market where negotiating power has shifted to buyers. Days on market average 54 as of February 2026 -- not extreme -- but with 30,000+ listings competing for attention, sellers have little leverage.

What the Score of 32 Reflects

The score reflects the current supply-demand imbalance. That imbalance can change. Houston has absorbed large inventory cycles before. But the data as of February 2026 says the market is working through supply, not past it.

PropertyIQ score as of February 28, 2026. Listing and inventory data as of February 1, 2026. Forecast data as of December 2025. All data for informational purposes only.