Texas Market & Rate Update: What 7.40% Mortgage Rates and 5+ Months of Inventory Mean for You
Monday, October 12, 2026
Mortgage rates moved higher again this week, while Texas buyers have more homes to choose from and more room to negotiate than they did in a tight market.
That is the short version. Here’s what the numbers may mean for your monthly payment, your offer, and your next step.
Where did mortgage rates land this week?
Freddie Mac’s weekly mortgage rate survey put the average 30-year fixed rate at 7.40% for the week ending October 8. That is up from 7.28% the week before, marking a seventh straight weekly increase. The 15-year fixed average was 6.73%.
Daily rate trackers were higher on October 12, around 7.44% to 7.55%. These figures are market benchmarks, not a quote for your specific loan. Your rate depends on details such as credit, down payment, loan type, and lender pricing.
One influence is the 10-year Treasury yield, which was around 5.24% at the October 9 close. When Treasury yields move, mortgage pricing can follow within days. The Mortgage Bankers Association also reported that purchase applications were down 15% year over year for the week ending October 2.
A year ago, Freddie Mac’s 30-year average was 6.34%. That difference matters in your budget, so it is better to plan with a current quote than rely on an older rate forecast.
What does 7.40% mean for a monthly payment?
Here is a simple example using Texas’s statewide median sale price of about $342,900 and 10% down:
Loan amount: $308,610
At 6.34%: About $1,920 per month in principal and interest
At 7.40%: About $2,135 per month in principal and interest
Difference: About $215 per month
This is an estimate, not a loan quote. It excludes Texas property taxes, homeowners insurance, mortgage insurance, and any HOA dues. Those costs can make a major difference to your actual monthly payment.
What does the Texas market look like by metro?
Statewide, the median sale price is about $342,900, with roughly 5.4 months of supply and about 153,800 active listings. Here’s a quick snapshot of the major metros:
Metro | Approx. median price | Months of supply | Typical time on market |
Dallas-Fort Worth | $389,000 | 4.4 | 60+ days |
Houston | $330,000 | 5.3 | 54 days |
Austin | $420,000 | 5.7 | 74 days |
San Antonio | $299,000–$310,000 | 5.2–5.9 | Varies by area |
Local figures can use different reporting periods and property types, so use these as a guide, not a comparison of identical data sets. For current statewide context, see the Texas Real Estate Research Center’s Texas Housing Insight.
DFW prices are holding relatively firm, but sales have slowed. Houston has elevated inventory and is described as more balanced. Austin remains softer, although pending contracts are up year over year. San Antonio has more homes available than in recent years and continued price pressure.
Is Texas leaning toward buyers?
More than before. Statewide supply is about 5.4 months, and the average home is taking about 62 days to sell. A typical seller price cut is around $12,000, or 3.3% off the original asking price.
The Texas REALTORS 2026 Homebuying Experience Report found that 69% of agents said their buyer clients did not compete against another offer, up from 57% last year. Nearly a third said their latest buyer succeeded after making just one offer.
As Texas REALTORS Chairman Jennifer Wauhob put it, “Buyers are benefiting from more choices and more time to make decisions, but many are facing affordability challenges.”
That sums it up: more choice and negotiating room, but monthly costs still deserve careful attention. Redfin data also showed that more than a quarter of active listings had a price cut in Dallas, San Antonio, and Austin. In Austin, a separate metro-specific measure found that 57.7% of active listings had cut their price at least once.
Are sellers helping with closing costs or rate buydowns?
Yes. A price reduction is one way for a seller to make a home more affordable. A seller credit is another. That credit may help pay eligible closing costs or discount points, which can reduce the cost of buying or lower a loan’s rate.
This is not a small trend. In August, 53.3% of Dallas-area sales and 58.5% of Houston-area sales included a seller concession, according to Redfin. Builders are leaning on incentives too: rate buydowns, closing-cost credits, and design allowances instead of list-price cuts.
A credit may be more useful to you than a price cut if it helps with your upfront costs or payment. But the best option depends on how long you expect to keep the loan and the exact terms. Credits must follow loan-program rules, and they cannot pay your down payment.
As a simple guide, FHA generally allows seller contributions up to 6% of the sales price. Conventional limits are generally 3% to 9%, depending on the loan-to-value ratio, with a 2% limit for investment properties. VA has a 4% limit on certain seller concessions; its rules for ordinary closing costs are different. The VA and Fannie Mae explain these program rules. Your actual usable amount depends on your loan and eligible costs.
What should you do if you’re buying this fall?
You may have more time to compare homes and negotiate than buyers had in a faster market. Use that time deliberately.
Get your numbers at today’s rate. Build your budget around a current loan estimate, not a hoped-for rate.
Ask for seller help in the offer. Closing-cost credits or a buydown may fit your needs better than a price cut.
Compare builder incentives carefully. Check the rate, fees, preferred-lender requirements, and whether the offer applies to the home you want.
Compare the full payment and cash needed to close. A low advertised rate is only one part of the picture.
Good question: should you wait for rates to fall? No one can promise what rates will do next. You can make a plan that works with today’s numbers and ask what options you have if conditions change.
What if you’re refinancing or have equity?
Higher rates make a second opinion more useful, not less. If you already have a mortgage, compare the full cost of a refinance with the benefit you expect. Depending on your goals and eligibility, a refinance may help with payment structure or accessing equity, but it is not automatically the right move.
If rates improve later, being prepared can make it easier to review your options. For now, let’s look at your current loan, goals, and costs before deciding whether anything needs to change.
Why compare wholesale lender mortgage rates now?
Different lenders can price the same borrower differently on the same day. That’s why comparing wholesale lender mortgage rates across a broad lender network can matter. It gives you more than one set of terms to review instead of a single lender’s menu.
I work with more than 100 wholesale lenders, without extra lender overlays of our own. We can compare options for your situation and explain the tradeoffs in plain English. If you already have an offer, ask us to review the rate, fees, credits, and loan structure side by side.
What can you expect from our team?
100+ wholesale lenders: More options to compare.
A 12-day clear to close: A speed proof point, not a guarantee for every loan.
96% approval rate: A strong record of helping borrowers move forward.
98% on-time closing: Dependable follow-through matters.
Available 8 AM to 8 PM, 365 days a year: Reach us when questions come up.
Calls returned in under 60 minutes: You deserve timely answers.
Want a clear next step?
Already have an offer? Request a second opinion. No pressure and no obligation. Just clear answers, a comparison you can understand, and help deciding what makes sense for you.
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