Community Impact’s Houston Market President Jason Culpepper sat down with real estate leaders from across the metro on Jan. 21 during the company’s first-ever InCIder Hour for the Houston metro to discuss what buyers, renters and investors should expect in 2026.
The panel consisted of Jim Carman from Howard Hughes, Chance Brown from CB&A, Realtors and Todd Johnson from Caldwell Companies, and was held at Community Impact’s Houston headquarters in Jersey Village.
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Affordability
Brown said the word of the year in the real estate universe is going to be “affordability.”
“That involves taxes, utilities, maintenance costs and insurance,” Brown said.
Insurance rates and operating costs for commercial tenants have increased significantly, Carman said, creating challenges for retailers and office space operators.
“We’ve certainly seen [insurance costs] go at unsustainable levels. ... Property taxes are up, operating costs are up. It makes it more difficult to develop,” he said. “These businesses are having to absorb a lot of that cost and [it] just makes it that much harder for them to maintain their retail space.”
On the residential side, the panelists said affordability is also reshaping homeownership trends.
The average age of first-time homebuyers has risen from the late twenties to the late thirties and forties, Johnson said.
Carman said shifting generational priorities are also influencing the balance between renting and owning—particularly as younger households weigh costs.
“Buying your first home was once a defining milestone, but is that really something that we're going to see for the next generation to come?” Carman said. “Renting is certainly something that allows a certain amount of flexibility and low maintenance.”
Mortgage rates
Mortgage rates stabilized around 6% in late 2025 and into 2026—a higher rate than the historically low levels seen in 2020 and 2021, according to data from the Federal Reserve.
During the pandemic, rates fell sharply, reaching historic lows near 2.65% in late 2020, before gradually climbing in 2022 and 2023.
However, these rates remain lower than previous decades, such as the '80s, when rates were higher than 19% at one point, data shows.
"We have an entire generation of buyers who think that 3% is normal, and it's just not,” Brown said.
Brown said many prospective homeowners are adjusting to what he called a “new normal” after a period of historically low interest rates. He emphasized that while rates are higher than the pandemic lows, they are not historically extreme.
Prior to the pandemic, in 2018 and 2019, 30-year fixed mortgage rates ranged from about 4.5% to 5%, according to the Federal Reserve.
One consequence of the pandemic-era low rates is that many existing homeowners have locked in mortgage rates well below current levels. This has created a reluctance to sell, Brown said.
“We don’t need to incentivize buyers right now. We need to incentivize sellers,” he said.
Mixed-use development
Mixed-use is going to continue to be a key focus for developers, Carman said.
“It creates what I call an ‘18-hour day,’” he said. “People come in the morning for coffee, at lunch for work, in the evening for dining, and they live nearby.”
Large-scale big-box retail is becoming increasingly difficult to sustain in master-planned communities, Carman said. Instead, developers focus on “pocket” retail locations that are designed for long-term community integration.
That same emphasis on flexibility and long-term livability is also shaping residential design.
“What you're seeing now is a lot more tendency towards flex spaces and things that can be used in a lot of different ways,” Johnson said. “The pandemic really changed how people think about the functionality of their homes, and developers are responding to that.”
Looking ahead
“We’re fortunate to be in the Houston market. We’re fortunate to be in Texas,” Carman said.
Between 2023 and 2024 alone, the metro added nearly 198,000 residents, the second‑largest numeric gain among U.S. metro areas behind New York, according to the U.S. Census Bureau.
“Houston, in particular, remains a safe harbor for investments because job growth continues to be strong and is expected to stay that way for the foreseeable future,” Brown said.
Employment forecasts from the Greater Houston Partnership project that the metro will add about 30,900 jobs in 2026, bringing total employment to a record level near 3.5 million.
Brown emphasized some of the biggest challenges facing Texas—and the Houston area in general—will be tied to resources that support growth and development.
“The two things everyone should be watching over the next five to ten years are water and high-speed data,” Brown added. “Most of the state remains in drought, and while recent legislation funded water infrastructure, ... it’s just a drop in the bucket.”
