Houston metro HousingGauge — October 5, 2026 | YELLOW 47

Welcome to the Houston metro HousingGauge, your weekly local market report for the week of October 5, 2026.

Here is the headline. Houston metro's HousingGauge score is 47 out of 100, which puts the market in the YELLOW zone. Conditions have weakened over the past three months, and financing remains expensive.

Three developments stand out this week.

First: Mortgage rates up 0.85 points in three months. The 30-year fixed rate averages 7.28%, versus 6.43% three months ago.

Second: Score down 10 points over 13 weeks. The score moved from 57 to 47 over the past 13 weeks, driven mainly by Mortgage Conditions (−7.0 points).

Third: Pending sales down 7.8% year over year. Contract signings are a leading indicator of closed sales over the next one to two months.

Now, what is behind the score?

Mortgage Conditions scores 12 out of 100. The 30-year fixed rate averages 7.28%, up 0.82 percentage points over six months. Financing remains expensive, limiting affordability for leveraged buyers.

Supply & Buyer Leverage scores 72 out of 100. Inventory is 0.7% lower than a year ago (36,485 active listings), with 5.5 months of supply. Homes take a median 66 days to sell at 96.9% of list price, and 24.4% of listings have had a price cut. Buyers have meaningful negotiating leverage.

Monetary Conditions scores 53 out of 100. The real policy rate is 1.24%, 0.23 points above the estimated neutral rate (r-star) of 1.01% — a near neutral stance. The fed funds rate has risen 0.24 points over six months.

Demand Trend scores 28 out of 100. Pending sales are 7.8% lower than a year ago and closed sales are 10.1% lower. Days on market are 6.5% longer than a year ago. Buyer demand has softened.

Valuation & Affordability scores 83 out of 100. The median home costs 4.0 times the median household income. Principal and interest on a typical purchase would take 26.4% of that income at current rates. Inflation-adjusted prices are 5.3% lower than a year ago. Valuations look comparatively reasonable.

Rental Economics scores 51 out of 100. A year of median rent equals 6.0% of the median price (a price-to-rent ratio of 16.7). Rents are flat year over year. Rental economics are middling.

The score is down 1 point from last week's report (48 to 47). Over 13 weeks it is down 10 points, from 57 to 47. The largest contributors were Mortgage Conditions (−7.0 points) and Monetary Conditions (−3.2 points).

So what would move Houston metro into the green? It is 22 points away, which would take a broad shift in conditions. Even these changes together would add only about 19 points: 30-year mortgage rate falls below 6.15% (now 7.28%); pending sales grow more than 7.5% year over year (now −7.8%); the Fed cuts more than 0.55 pts over six months (now +0.24 pts); policy gap (real policy rate minus r-star) narrows below −0.90 pts (now +0.23 pts); mortgage rates fall more than 0.10 pts over three months (now +0.85 pts); and months of supply rises above 6.5 months (now 5.5 months).

And what could make conditions worse? Any one of these could push the score down a status level: 30-year mortgage rate rises above 8.00% (now 7.28%); policy gap (real policy rate minus r-star) widens above +1.15 pts (now +0.23 pts); and months of supply falls below 3.5 months (now 5.5 months).

That is the Houston metro HousingGauge for this week. The HousingGauge score describes market conditions. It is not a recommendation to buy or sell, and it is not individualized financial advice. For charts, sources and the full methodology, visit housinggauge.com. Thanks for listening.