Houston Real Estate Market 2026

As of May 2026, the Houston market is operating in a supply-accumulation phase. The median sale price across the three-county footprint stands at $344,125, a 2.3% year-over-year gain, while the median days on market has extended to 46 days and the sale-to-list ratio has settled at 0.9681. These figures, drawn from closed-sale transaction data, are distinct from the AVM-based owner-estimated values used in the Verus-AI forecast model and should be read as a contemporaneous market-clearing signal rather than a valuation input.

The supply picture warrants attention. Active inventory across the three counties totals 26,371 homes. At 4.0 months of supply, the market sits in territory that is neither deeply constrained nor overtly distressed, but the directional pressure from new listings outpacing closings suggests that sellers are absorbing more negotiating friction than the headline price gain implies. The median price per square foot of $161 and the sub-1.0 sale-to-list ratio are consistent with that interpretation.

Readers should note that the market-snapshot figures above are third-party observed data covering the three-county approximation of the Houston metro. They are not inputs to the Verus-AI scoring or forecast model, which draws on ACS owner-estimated home values and a transaction history running from 2014 through 2024.

The population-weighted median home value across the 1,359 scored Houston tracts is $272,400. That figure sits meaningfully below the May 2026 observed median sale price of $344,125, a divergence that reflects the different measurement bases: ACS owner-estimated values tend to lag transaction prices, particularly in markets that have seen rapid appreciation. The gap is worth flagging because it affects how one interprets the Verus-AI five-year forecasts, which are anchored to the ACS-derived base values rather than to current transaction prices.

The leading tract in the ranked table, Houston - Tract 5401, illustrates the appreciation trajectory most clearly. The forecast chart for that tract shows the central estimate reaching $413,628 by 2029, implying a five-year gain of 37.01% and a compound annual growth rate of 6.5%. The 80% confidence band at the 2029 terminal year spans from $324,523 to $527,199, a width of $202,676, a range that widens materially from the $69,907 band at the 2025 near-term forecast. That widening is a structural feature of multi-year price models and should temper any point-estimate precision the central forecast might otherwise imply.

Across the full scored universe of 1,359 Houston tracts, the Verus-AI score distribution runs from a minimum of 0 to a maximum of 78, with a median of 53.0 and a mean of 51.18. The 10th-percentile score is 34.0 and the 90th-percentile score is 65.0, indicating a moderately wide dispersion. The five-year forecast distribution tells a similar story: the 10th-percentile forecast is 14.0%, the median is 32.21%, and both the 75th and 90th percentiles converge at 37.01%, suggesting the model's upper forecast band is effectively capped at that level for the current scored universe.

The 15 top-ranked tracts in the ranked table below span all three counties in the data, FIPS 48201 (Harris County), 48157 (Fort Bend County), and 48339 (Montgomery County), and carry Verus-AI scores ranging from 75 to 78. All 15 hold a grade of B. Of the 15, 13 carry a Low or Moderate risk designation; the remaining two carry an Elevated designation. None of the top 15 carries a High risk label, though it is worth noting that the data confirms not all top-ranked tracts are Low or Moderate risk, as two Elevated-risk tracts appear in the set.

Fort Bend County contributes three tracts, Houston - Tract 5401, Cinco Ranch, and Houston - Tract 5600, while Montgomery County contributes Houston - Tract 2102. The remaining 11 tracts fall within Harris County, which, given its size relative to the other two counties, is not surprising.

Current values among the top 15 range from $133,499 for Kashmere Gardens to $422,900 for Houston - Tract 5503, a spread that underscores the model's indifference to absolute price level when assigning scores. Aldine, with a current value of $138,521 and a median household income of $69,342, carries the same Verus-AI score of 76 as Humble, where the current value is $244,000 and the median household income is $130,218. The score reflects the model's assessment of momentum, income trajectory, and forecast appreciation rather than a simple price-tier ranking.

Income growth is one of the more differentiated signals in the Houston tract-level data. Among the 20 tracts shown in the ranked tables, the sharpest income decline belongs to Houston - Tract 2102 (tract ID 48201532102), where median household income fell 12.61% year-over-year. That contraction, combined with a Verus-AI score of 0 and a High risk designation, places it firmly in the bottom tier. By contrast, Aldine (tract ID 48201222100) in the top-ranked set recorded an 18.31% income gain, the largest year-over-year income increase among the 20 tracts in the ranked tables.

The momentum-leaders table surfaces a different dimension of income dynamics. Westchase (tract ID 48201452204) recorded a 173.53% year-over-year income gain, and Medical Center recorded 167.75%, figures that are striking in magnitude but that the model tempers with relatively modest scores of 47 and 53, respectively, and five-year forecasts of 23.42% and 25.06%. The divergence between extreme near-term income acceleration and restrained forecast appreciation suggests the model is discounting the durability of those income spikes, treating them as potentially transitory rather than as durable structural shifts.

Near Northside (tract ID 48201212300) in the momentum-leaders table presents a more coherent signal: a 33.33% income gain pairs with a Verus-AI score of 70 and a five-year forecast of 37.01%, placing it among the higher-conviction entries in that table. Tomball similarly combines a 19.05% income gain with a score of 75 and a 37.01% forecast. Readers should note that income figures are ACS-derived estimates and carry their own survey-based uncertainty, particularly for smaller tracts.

Among the five lowest-ranked tracts, two, Houston - Tract 2102 (48201532102) and Sharpstown, recorded negative income growth, at -12.61% and -5.73% respectively. The remaining three showed flat income growth of 0.0%. That uniform absence of positive income momentum across all five bottom tracts is consistent with the model's F grades and High risk designations for each.

The Verus-AI model generates five-year forecasts for the 2025-2029 window across all 1,359 scored Houston tracts. The mean five-year forecast across that universe is 28.59%, with a median of 32.21%. The distribution is left-skewed: the 10th-percentile forecast is 14.0%, while both the 75th and 90th percentiles converge at 37.01%, indicating that the upper tail of the forecast distribution is compressed. A meaningful share of tracts cluster at or near that 37.01% ceiling, while the lower tail extends to negative territory.

The top-ranked tracts, as shown in the ranked table, illustrate the ceiling effect clearly. Among the 15 top-ranked tracts, the five-year forecasts range from 32.41% for Houston - Tract 5600 to 37.01% for eight of the 15 tracts, specifically Houston - Tract 5401, Alief, Aldine, Houston - Tract 2100, Houston - Tract 0901, Kashmere Gardens, Spring, and Houston - Tract 1200. The forecast chart for Houston - Tract 5401, the leading tract by Verus-AI score, shows the central estimate rising from $321,523 in 2025 to $413,628 in 2029, with the 80% confidence band widening from a $69,907 spread in 2025 to a $202,676 spread at the 2029 terminal year.

All five carry a grade of F, a Verus-AI score of 0, and a High risk designation. The current values in this group range from $11,872 for Oak Forest, an outlier that likely reflects a data anomaly or a non-standard property type, to $287,500 for Westchase (tract ID 48201452103). The uniformity of the -4.9% forecast across all five bottom tracts, within the 20 tracts shown in the ranked tables, suggests the model is assigning a floor-level negative outcome rather than differentiating further within the lowest-scoring tier.

For context, the scored universe of 1,359 Houston tracts contains tracts with income declines far steeper than anything in the ranked set. The sharpest income decline across all 1,359 scored Houston tracts belongs to tract ID 48201423303, at -54.08%, compared with the -12.61% that represents the sharpest income decline among the 20 tracts shown in the ranked tables. That gap is a reminder that the ranked tables surface the extremes of the scored set, not the extremes of the full universe.

Of the 1,756 census tracts within the three-county Houston footprint, 1,359 carry sufficient transaction history to be scored, representing 77.4% of all constituent tracts. The remaining 397 tracts are unscoreable under the current methodology, typically because they lack the full history window required for model calibration.

They are not guarantees, and realized outcomes outside the band are consistent with the model's design.

Several data-quality considerations apply. ACS owner-estimated home values, which anchor the Verus-AI base values, are survey-derived and lag transaction prices; the gap between the population-weighted median value of $272,400 and the May 2026 observed median sale price of $344,125 reflects this lag. Income figures are similarly ACS-derived and carry survey uncertainty, particularly for smaller tracts. The Oak Forest entry in the bottom-five table, with a current value of $11,872 and a rent-to-price ratio of 156.97%, is an outlier that likely reflects a data anomaly rather than a market-clearing price; readers should treat that specific observation with caution. The market-snapshot figures, active inventory, closed sales, new listings, months of supply, median sale price, and sale-to-list ratio, are third-party observed data as of May 2026 and are not inputs to the Verus-AI model. The scored universe covers FIPS counties 48201, 48157, and 48339; tracts outside those boundaries are not represented.