Quarter 2 Market Recap

Inventory Continued to Rise

One of the largest trends across Texas and East Texas during Q2 was increasing housing inventory. Sellers who delayed listing properties during the higher-rate environment began re-entering the market in spring 2026. The Texas Real Estate Research Center reported statewide active inventory up more than 11% year over year entering 2026, with new listings surging ahead of the spring season.

In East Texas, this meant buyers had more options and more negotiating leverage. Homes generally stayed on the market longer compared to prior years. Smith County median days on market reached approximately 57 days in April 2026, signaling a healthier but slower-paced market.

Home Prices Stabilized

Unlike many major Texas metro areas that saw sharper price corrections, East Texas remained relatively stable due to affordability and continued demand from buyers relocating from larger cities.

The Tyler market continued showing resilience:

• Median sold prices generally ranged from the upper $200,000s into the low-to-mid $300,000s.
• Inventory expanded significantly, giving buyers more selection.
• Longview maintained median listing prices near $300,000 with balanced rental demand and steady activity.

Rural acreage properties and barndominiums remained especially attractive throughout East Texas. Properties with five or more acres, shops, secondary living quarters, and recreational features continued drawing strong interest despite higher borrowing costs.

Mortgage Rates Slowed Momentum

The largest challenge during Q2 remained financing affordability. Mortgage rates climbed back into the mid-to-upper 6% range during May after briefly dipping below 6% earlier in the year.

For many East Texas buyers, monthly payment shock became more important than overall home price. This caused:

• Longer decision timelines
• More price reductions
• Increased seller concessions
• More requests for rate buy-downs

Move-up buyers especially remained cautious because many homeowners still hold mortgages in the 2–4% range and are reluctant to trade into higher monthly payments.

Commercial Real Estate Activity

Commercial real estate across East Texas remained active during Q2, particularly in smaller markets where pricing remains far below major Texas metros.

Industrial buildings, mechanic shop properties, warehouses, and mixed-use investment properties saw continued demand around:

• Kilgore
• White Oak
• Tyler
• Longview

Investors continued targeting East Texas because cap rates generally remain more attractive than larger urban markets, while property taxes and acquisition costs stay comparatively lower.

However, financing costs also impacted commercial transactions. Many investors became more conservative with underwriting assumptions, and deals often required additional negotiation on pricing or seller financing options.

Land Market Remained Strong

One of the strongest sectors during Q2 was rural land.

East Texas continued benefiting from buyers seeking:

• Recreational land
• Future homesites
• Small ranches
• Timber tracts
• Hunting property
• Weekend retreats

Areas surrounding Big Sandy, Hawkins, Gilmer, and Mineola remained particularly active because they offer larger acreage at prices significantly below DFW-area markets.

While residential home appreciation slowed, quality land continued holding value surprisingly well.

Quarter 3 Outlook — Summer & Fall 2026

Expect a More Balanced Market

Quarter 3 is expected to continue shifting toward a balanced market where neither buyers nor sellers hold overwhelming leverage.

Key expectations include:

1. More Negotiation

Buyers will likely continue asking for:

• Closing cost assistance
• Interest rate buy-downs
• Repairs
• Longer option periods

Sellers who aggressively overprice properties may experience extended market times.

2. Well-Priced Homes Will Still Sell

Despite slower activity overall, desirable homes in good condition and properly priced are still moving quickly throughout East Texas.

Properties expected to perform best include:

• Updated homes under $350,000
• Rural homes on acreage
• Properties with workshops or additional living quarters
• Homes in strong school districts
• Investment-friendly small commercial properties

3. Mortgage Rates Will Remain the Wild Card

Most analysts expect mortgage rates to remain above 6% through much of 2026.

If rates stabilize or decline modestly during Q3, East Texas could see a noticeable increase in buyer activity heading into fall. However, if inflation pressures persist and rates climb further, the market could soften slightly more.

Overall East Texas Forecast

East Texas remains in a stronger position than many larger Texas markets because of:

• Relative affordability
• Population growth from relocations
• Strong demand for land and rural living
• Limited high-density overbuilding
• Continued appeal to retirees and remote workers

Rather than a crash, the market is behaving more like a normalization period after several years of unsustainable rapid appreciation.

For buyers, Q3 may offer one of the best opportunities in several years to negotiate favorable terms.

For sellers, proper pricing and presentation will be more important than ever.

And for investors, East Texas continues offering long-term upside due to lower acquisition costs and consistent regional demand