Houston Housing Market Update Memorial Day 2026: Rates Climbing Fast and What Buyers Must Do Right Now

A Rate Market That Has Been Hit Hard and What It Means for Buyers

Happy Memorial Day and thank you to everyone who serves and has served. This week's market update comes with some significant developments in both the mortgage rate environment and the Houston real estate market that buyers, sellers, and real estate professionals need to understand clearly right now.

The rate market has been taking hits repeatedly over the past week and the forces driving those moves are not going away quickly.

What Is Driving Mortgage Rates Higher Right Now

Two primary factors are pushing rates higher simultaneously and the combination is creating significant upward pressure on the rate environment.

The first is oil prices. The ongoing conflict with Iran and the situation in the Strait of Hormuz and the Persian Gulf has pushed oil prices higher. Oil prices lead to inflation and inflation leads to higher mortgage rates through the bond market. That chain reaction has been playing out consistently throughout the year and it is doing so again right now with particular intensity.

The second factor is less visible but equally meaningful. The Federal Reserve has slowed down its purchase of Treasury bills. When the Fed buys Treasuries from banks it gives those banks more liquidity which allows them to lend more money. More lending is inflationary. When the Fed pulls back on those purchases it reduces that liquidity but it also means there is less artificial demand for Treasury bonds which pushes yields higher and mortgage rates higher with them.

As Rich Bonn at Habayit Home Loans explains rates have moved up between half a percent and three quarters of a percent since late last week. That is a significant and rapid move that changes the monthly payment picture meaningfully for buyers who are in the market right now.

The Fed Meeting Minutes That Buyers Need to Know About

The Federal Reserve minutes from the April meeting were just released and the language is notably hawkish. The Fed is signaling that if inflation does not move meaningfully toward their 2 percent target they are considering the possibility of increasing rates rather than cutting them. The most recent inflation reading came in at 3.8 percent which is substantially above that target.

For buyers who have been waiting for the Fed to cut rates before moving forward this is an important signal. The path to rate cuts is not as clear or as near as many buyers have been assuming and the possibility of rates moving higher rather than lower is a real scenario that the Fed itself is now discussing openly.

What Every Buyer Needs to Do Right Now

The guidance from Rich Bonn is direct and unambiguous. If you like your rate lock it. Do not wait. Do not try to time the market looking for a better number. The direction of travel in the current environment is higher not lower and the buyers who are locking right now are doing so out of concern that continued waiting will produce a worse outcome not a better one.

A rate locked today at a number that felt high last week may look favorable compared to where rates could be in two to four weeks if the current inflationary pressures continue. The uncertainty is real and the risk of waiting is real. Locking provides certainty in an environment where uncertainty is the dominant characteristic.

What Is Happening in the Houston Real Estate Market

Despite the rate pressure the Houston market is showing resilience in ways that are worth noting.

New listings are up 0.3 percent. Closings are up 2.4 percent year over year as the pipeline of pending listings continues to clear. Showings are up approximately 11 percent despite the rate increase which is a meaningful signal that buyer demand is still present and active in the Houston market even as financing costs have risen.

The week before graduation creates some natural slowdown in listing activity as families focus on other priorities and that is contributing to the modest pace of new listings in the current period. Expect listing activity to pick back up as summer progresses.

On the rental side of the Houston market new lease listings are up and inventory is hanging in the market a little longer than before. Lease prices for single family homes are down approximately 2.6 percent comparing April 2024 to April 2025 which may reflect a shift toward smaller rentals, some softening in demand driven by inflation pressure on household budgets, or a combination of both. The rental market remains relatively strong overall despite that modest pricing adjustment.

A Thank You to Everyone Who Came Out on May 20th

A genuine thank you to everyone who braved the rain, lightning, and Galleria traffic to attend the More Calls More Clients More Closings event on Wednesday May 20th. Coach Tim Davis delivered an outstanding presentation on personal branding mastery with AI and the session on how to get a mortgage when your tax return says no generated significant engagement from the real estate professionals in attendance.

As a thank you to attendees Rich Bonn will be launching a weekly exclusive email delivering deeper dives on each of the branding strategies Tim covered. That content is exclusively for people who were in the room. If you were not there keep an eye out for future events where personal branding mastery with AI may be coming to a location near you.

For questions about the Houston market, current rates, or non-QM lending options for self-employed buyers reach out to Rich Bonn at Habayit Home Loans directly.

Sources

HoustonAssociationofRealtors.com FederalReserve.gov MortgageNewsDaily.com EnergyInformationAdministration.gov BureauOfLaborStatistics.gov