By Mickie Cioccia, Broker Associate – eXp Realty | January 2026
As 2026 begins, many Katy homeowners and buyers are asking the same question: Is this finally the year the real estate market feels normal again? After several unpredictable years, the answer is leaning toward yes—with some important caveats.
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Let’s break down what’s ahead for mortgage rates, home prices, and what it all means if you’re planning to buy or sell in Katy this year.
Mortgage Rates in 2026: Lower, But Not Low
If you’re holding out hope for 3% mortgage rates, it’s time to reset expectations. Those historic lows are firmly in the past—for now. That said, there is progress happening.
What we’re seeing:
- Mortgage rates ended 2025 around 6.1%
- Most forecasts predict rates will settle between 5.9%–6.5% by the end of 2026
- Fannie Mae projects rates could dip just below 6%
- A more aggressive drop into the mid-5% range is possible, but only if inflation continues to cool and the economy avoids shocks
While this isn’t a dramatic shift, it is meaningful. Even small rate declines improve affordability and open the door for more buyers to reenter the market.
Why Rates Are Moving Slowly
The Federal Reserve is easing rates carefully. Inflation remains above its target, and the labor market—while softening—is still relatively stable. Mortgage rates are also closely tied to the 10-year Treasury yield, which is expected to hover near 4% throughout the year.
Bottom line: Rates are trending in the right direction, but patience is required. Anyone promising exact rate predictions should be taken with a grain of salt.
What This Means for Katy Home Buyers
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2026 is shaping up to be one of the most buyer-friendly years we’ve seen since before the pandemic.
Why buyers have more leverage:
- Inventory is improving as some rate-locked homeowners decide to sell
- Bidding wars are far less common than in 2021–2022
- Builders are offering incentives like rate buydowns and closing cost assistance
- Gradually declining rates increase monthly affordability
Buyer tip: Get pre-approved early. When rates dip or the right home hits the market, preparation matters more than timing the absolute bottom.
And remember—you can refinance later. The right house at an affordable payment often matters more than waiting for a perfect rate that may never arrive.
What Sellers Need to Know in 2026
The Katy market is no longer overheated—but it’s not weak either. We’re in a balanced market, and that means pricing and presentation are critical.
Successful sellers are doing this:
- Pricing correctly from day one
- Preparing homes to show well online and in person
- Staying flexible during negotiations
- Timing listings strategically as buyer activity improves
Well-priced homes in strong Katy neighborhoods—like Cinco Ranch—are still selling efficiently. The difference now is that buyers expect value, not inflated pricing.
The Big Opportunity This Year
Selling your Home or Buying A Home
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There’s a quiet upside many people overlook: refinancing potential.
Homeowners who bought in 2023–2024 at rates above 7% may finally see opportunities to refinance later this year or into 2027. Even a small rate drop can mean hundreds in monthly savings.
Additionally:
- Negotiation power has returned
- Market conditions are healthier and more predictable
- Buyers and sellers are making decisions based on data, not panic
Is There Ever a Bad Time to Sell in Katy?
In short—no. Katy’s market benefits from year-round demand driven by:
- Katy ISD school moves
- Corporate relocations
- Upsizing, downsizing, and lifestyle changes
Waiting for a “perfect” season often just means listing alongside more competition. Homes that are priced right and presented well sell in any month.
Two rules that always work:
- Price it right from the start
- Make a strong first impression online
Do those two things, and timing becomes far less important.
2026 Outlook: Cautious Optimism
After years of uncertainty, 2026 feels different—in a good way.
- Rates are slowly improving
- Inventory is more balanced
- Buyers have choices
- Sellers must be strategic
- Negotiations are normal again
This is what a healthy market looks like.
Final Thoughts
Real estate is always local, and Katy continues to benefit from strong schools, job growth, and community development. While national headlines can be noisy, the fundamentals here remain solid.
Whether you’re buying, selling, refinancing, or just watching the market, the key is simple: make decisions based on your personal goals—not fear or hype.
2026 isn’t about rushing. It’s about making smart, informed moves.
Questions about buying or selling in Katy this year?
I’m here to help you navigate the market with clear advice and no pressure—just honest guidance.
Mickie Cioccia is a Broker Associate with the Mickie C Team at eXp Realty, specializing in Katy and surrounding areas. She also operates PF Property Management and Katyites.com, your source for local Katy news and real estate insights.
