The Texas housing market has never been a place for the faint of heart. It is a market defined by scale, momentum, and an ability to surprise even seasoned industry professionals. And while 2026 (thru Q3) has brought another year of contraction in overall residential construction activity, the latest HBW Building Activity Trend Report suggests that the story is far more nuanced than a simple decline in permit volume.
Through the third quarter of 2026, Texas has recorded 53,289 new residential construction permits, representing an 11% year-to-date decrease compared to the same period in 2025. At first glance, that figure may appear concerning. However, as I state often, context matters. The market experienced a 9% year-to-date decline in 2025 compared to 2024, meaning today’s slowdown is less of a sudden downturn and more of a continuation of an existing normalization trend. In other words, Texas residential construction has not slammed on the brakes. It has simply eased off the accelerator.
As builders, developers, suppliers, and service providers evaluate current conditions, one fact becomes increasingly clear: regional performance varies dramatically across the state’s major metropolitan areas. While Houston is experiencing the sharpest contraction, Austin has returned to growth, and certain counties within Dallas and Houston are posting noteworthy gains despite broader market headwinds. For this reason, we are going to take a closer look at the latest figures, both overall, statewide, and by region:
The statewide decline of 11% reflects a market adjusting to changing economic conditions, evolving consumer demand, financing costs, labor availability, and land development dynamics. Even so, Texas remains one of the nation’s most active residential construction markets. The four major metropolitan regions tracked by HBW’s latest report include: Houston, Dallas-Fort Worth, Austin, and San Antonio. Together, the markets account for the overwhelming majority of new residential construction permit activity across the state. While total permit volumes are down in comparison to last year, several local markets continue to demonstrate resilience, and some are showing signs of renewed expansion.
Houston – The Volume Leader Despite Larger Declines
Houston continues to dominate Texas residential construction activity. Through the third quarter of 2026, the Houston metropolitan area recorded 24,447 new residential construction permits, maintaining its position as the state’s largest market by volume. However, the volume actually reflects a 16% year-to-date decrease compared to the same period in 2025, and given Houston’s size, even modest percentage shifts have significant effects on statewide totals.
Among the five counties included in the Houston region, construction activity remains concentrated in three key counties:
Harris County – Harris County led the region with 8,734 permits through Q3 2026. However, activity reflected a sharp declining, posting a 33% year-to-date decrease compared to 2025. As the region’s historical construction powerhouse, Harris County’s performance has likely played a major role in Houston’s overall decline.
Montgomery County – Montgomery County added 7,440 new residential construction permits through the third quarter, reflecting a 15% decrease from the same period last year, reflecting softening demand but still substantial construction volume.
Fort Bend County –The latest data from Fort Bend shows a bright spot of sorts, and perhaps the most noteworthy development in the Houston market. Through Q3 2026, Fort Bend recorded 5,064 new residential construction permits, representing a 20% increase over 2025. Growth of this level is particularly significant because Fort Bend experienced a 15% decline the previous year. The county appears to have moved beyond stabilization and into renewed expansion. While one year does not establish a long-term trend, Fort Bend’s resurgence is certainly a development worth watching during the fourth quarter and beyond.
Dallas
The Dallas metropolitan area recorded 17,701 new residential construction permits through the third quarter of 2026, reflecting an 11% decrease year over year, matching the statewide average almost exactly. On the surface, Dallas appears to be following broader Texas trends. A closer examination, however, reveals a market experiencing significant redistribution of development activity. For this reason, it is worth looking at the construction activity from a county level:
Tarrant County – Tarrant County remains one of the state’s strongest growth stories. Through Q3 2026, the county recorded 6,702 permits, representing a remarkable 36% year-to-date increase compared to 2025. The increase becomes even more impressive when viewed alongside last year’s performance. In 2025, Tarrant County posted a 66% year-over-year increase in new residential construction activity. Two consecutive years of substantial growth suggest that this is more than a temporary fluctuation. Builders continue to find opportunities in Tarrant County, and the market appears to be attracting sustained development investment.
Collin County – The Dallas region’s second major construction center, Collin County, moved in the opposite direction. Through Q3 2026, Collin County recorded 5,068 new residential construction permits, representing a nearly 29% decrease from the same period in 2025. Despite the decline, Collin County remains one of the most active residential construction markets in Texas, though growth has clearly moderated compared to previous years (2024 set a rather high bar).
Austin
Among the major metro areas in Texas, Austin delivered the most encouraging overall performance as of late. Through Q3 2026, the Austin market recorded 6,473 new residential construction permits, reflecting a 9% year-to-date increase compared to 2025. After several years of market adjustments and affordability challenges, Austin appears to be finding its footing again. That being stated, there are two counties where the bulk of new home construction can be found, and those counties are as follows:
Travis County – Travis County recorded 3,381 permits through the third quarter, reflecting an impressive 23% year-to-date increase and making it one of the strongest-performing counties among all major Texas markets.
Williamson County – Williamson County added 2,227 new permits through Q3. While growth was more modest, the county still achieved a 3% increase compared to the same period in 2025.
Together, Travis and Williamson counties account for the majority of Austin-area activity and indicate a market that is moving against the broader statewide trend. The elevated figures from Austin demonstrate that housing demand remains strong in select Texas markets despite higher financing costs and ongoing economic uncertainty.
San Antonio
The San Antonio metropolitan area recorded 4,668 new residential construction permits through Q3 2026; this reflects an 11% year-to-date decrease, aligning almost perfectly with the statewide average. Out of the three counties that make up the San Antonio area, there were two where the bulk of new construction activity took place:
Bexar County – Bexar County recorded 2,965 permits through the third quarter; while this represents a 13% year-to-date decline compared to 2025, it still accounts for the majority of new residential construction activity within the region.
Guadalupe County – Guadalupe County added 1,011 permits through Q3 2026. Permit activity declined by slightly more than 14% year over year, reflecting broader regional trends.
The Luxury Construction Segment Remains Healthy
One of the most interesting narratives emerging from the Q3 data involves homes valued above $500,000. Despite broader permit declines, higher-value residential construction remains surprisingly resilient and steady.
Dallas Continues to Lead Luxury Construction – Dallas maintains the highest concentration of permits for homes exceeding $500,000 in value. Through Q3 2026, nearly 3,500 permits have been recorded in this category. Considering that Dallas closed 2025 with 5,665 higher-value permits, current activity levels suggest the market remains generally on pace with historical trends.
Houston Exhibits Strong Performance – Houston is also demonstrating remarkable strength in the higher-value housing segment. Through Q3, there were a total of 1,570 new residential construction permits for homes valued above $500k. With Houston recording 2,086 higher-value permits during all of 2025, current activity suggests the luxury segment remains healthy and could potentially finish the year near or above prior-year levels if current patterns continue. While data of this nature may usually be overlooked, it is noteworthy because Houston is traditionally recognized for its scale rather than its concentration of luxury construction. The current data suggests that demand in the upper end of the market remains solid.
Looking Beyond the Headlines
If there is one thing that I have learned in the many years of analyzing housing markets, it is that a singular data point rarely defines a trend and that you must look far beyond the eye-catching headlines. The statewide 11% decline in residential construction permits through Q3 undoubtedly captures attention, yet focusing solely on that number misses the larger story unfolding across Texas. What we are seeing is not a broad-based decline, but a market that remains highly differentiated across regions.
What emerges from the data is a market in transition rather than one in decline. Austin has returned to growth, Tarrant County continues to benefit from sustained expansion, and Fort Bend County is experiencing a noteworthy comeback. At the same time, higher-value residential construction remains resilient in both Dallas and Houston, while Houston continues to lead the state in overall construction volume despite facing more challenging year-over-year comparisons.
Residential construction in the Lone Star State remains highly dynamic and highly regionalized. Builders who understand individual county-level trends are likely to gain a significant competitive advantage over those relying exclusively on statewide statistics. As always, this Q3 overview highlights only the highest-concentration markets and the most significant year-over-year shifts. The deeper data resides within the full HBW Building Activity Trend Reports, where subscribers can analyze multi-year trends, county-level permit activity, valuation segments, and localized market patterns that influence strategic decisions regarding land acquisition, development, construction planning, and market expansion.
Because in Texas construction, the question is rarely whether homes are being built. The real question is: where are they being built next? And as the 2026 data continues to unfold, that answer appears to be changing county by county.
To gain more information on the builders, homeowners and permits for the construction activity above, check out HBW for your copy of the latest construction data reports. To gain access to the HBW database and receive custom and detailed reports on the latest residential and commercial building activity in Florida, Georgia, Texas, Alabama, and Oklahoma, please contact HBW for details.