*
*12‑Month Forecast to June 2026 – Context**
The outlook was built amid persistent uncertainty. National and state growth slowed last year, yet inflation remained stable despite new tariffs. The Fed appears ready to cut rates, while the Trump administration pushes policy changes that courts are challenging. These dynamics shape our projections.
**Core Assumptions**
We assume no new macro or geopolitical shocks alter the U.S. or Texas trajectory. Existing trade, tax, and immigration policies remain in force, but no new measures will shift the path. Geopolitical events such as the Ukraine war or Middle‑East instability are expected to stay at current levels. A recession is not anticipated over the next year.
**Key Macroeconomic Drivers**
| Driver | U.S. | Texas | Uncertainty |
|--------|------|-------|-------------|
| GDP (3Q26 YoY) | 2.0–2.25 % | 2.25–2.65 % | Moderate |
| Payroll Employment (Sep 26) | 0.8–1.2 % | 1.5–1.9 % | Moderate |
| Personal Income (Sep 26) | 4.75–5.25 % | 4.75–5.25 % | Moderate |
| Personal Consumption (Sep 26) | 2.3–2.7 % | – | Moderate |
| Population (TX 2026) | – | 1.2–1.6 % | Moderate |
| Fed Funds Target (Sep 26) | 3.0–3.5 % | – | Significant |
| 30‑yr Mortgage | 6.0–6.4 % | – | Significant |
| CPI (Sep 26) | 2.1–2.5 % | – | Significant |
| WTI (Sep 26) | $65 | – | Significant |
| Henry Hub (Sep 26) | $3.25 | – | Significant |
**Asset Forecasts**
*Single‑Family Housing*
- Inventory: 8.3 M homes, 8 M detached.
- 2025 sales: ~340 k units; 2026 permits rise 4 % to 169 k.
- 2026 sales: ~340 k units, 2 % growth vs. 2025, driven by lower rates.
- Median price: $345 k in 2025, rising 1.5 % to $350 k in 2026.
- Rents: flat to slightly up, $2.2–$2.3 k/month.
*Multifamily*
- 2.5 M units statewide; 92 k delivered 2024‑25.
- 2026 deliveries <40 k units.
- Rents: new‑unit growth remains soft; stabilized units flat to slightly positive.
*Office*
- 1.2 B sq ft leasable; 82 sq ft per worker.
- 2025 deliveries: +6 M sq ft (0.6 %).
- 2026 deliveries: +5 M sq ft (0.6 %).
- Net absorption: 4–5 M sq ft, near equal to deliveries.
- Rents: Class A+ +, Class A flat/+, Class B/C negative; 2026 averages $25 (C), $29 (B), $32–$51 (A).
*Industrial*
- 1.8 B sq ft leasable; 128 sq ft per worker.
- 2025 inventory grew 2.5 % (+44 M sq ft).
- 2026 deliveries: ~50 M sq ft (3 % of inventory).
- Net absorption: ~2.8 % of inventory, ~10 M sq ft quarterly.
- Rents: Houston & San Antonio 3–4 % growth; DFW 2 %; Austin slight decline.
*Retail*
- 1.5 B sq ft leasable; 51 sq ft per person.
- 2025 deliveries: +10 M sq ft.
- 2026 deliveries: +5 M sq ft (0.5 %).
- Net absorption: 0.5–1 % of inventory.
- Rents: DFW +3 % YoY; other markets +2 %.
*Rural Land*
- 142 M acres (~83 % of Texas land).
- 2025 median price per acre up <2 % YoY; sales volume low but stable.
- 2026 sales: flat to slightly down early, up YoY by year‑end.
- Median price: likely hold or modestly rise; regional variation expected.
**Legal & Regulatory Outlook**
Federal: Tariff uncertainty, spending & tax cuts, agency rule‑making.
Texas Legislature (89th Session) – key statutes:
- **SB 15**: Limits density restrictions.
- **SB 840**: Enables non‑residential to residential conversion without zoning change.
- **SB 2477**: Encourages mixed‑use conversion, removes impact fees.
- **HB 24**: Reduces zoning protestability.
- **SB 1883**: Alters impact‑fee imposition.
- **SB 1566**: Allows utilities to serve properties outside ETJ.
- **HB 2559**: Limits moratoriums on development.
- **SB 7**: Funds water infrastructure (voter approval).
- **SB 4**: Raises school‑district homestead exemption to $140 k (voter approval).
- **SB 23**: Increases elderly/disabled exemption to $60 k (voter approval).
- **SB 17**: Restricts foreign ownership of Texas real estate.
**Data Sources**
Single‑family: Texas REALTORS® Data Relevance Project, U.S. Census ACS.
Multifamily, office, industrial, retail: CoStar Group, U.S. Census ACS.
Rural land: Texas A&M Natural Resources Institute, Texas Farm Bureau.
