If you’ve been wondering where the Dripping Springs and Texas Hill Country real estate market is headed in 2026, you’re not alone. Almost every client conversation lately includes the same question: “Are things finally turning around?”
Here’s my honest take—this is a prediction, not a guarantee—but at NestHaven Properties, we believe the market slowdown of the past two years may be giving way to the early stages of a recovery.
The Market Feels Different in Late 2025
After a long stretch of high borrowing costs and cautious buyers, conditions across the Hill Country are beginning to shift. Recent Federal Reserve rate cuts have not yet produced massive changes in 30-year mortgage rates, but they’ve helped bring rates to their lowest level in roughly 18 months.
That alone is beginning to lift sentiment. Homes that sat for months earlier this year are seeing more showings, and buyers who were waiting on the sidelines are starting to test the waters again.
Deals Still Exist—But the Window May Be Closing
Right now, there’s still more supply than demand in many Hill Country submarkets. For buyers, that means leverage and opportunity. But if rates continue to trend down, we expect those opportunities to narrow.
NestHaven’s view is that the window for buyers to get exceptional deals is likely closing. Improved affordability tends to draw demand back in quickly, and we’re already seeing the first signs of that dynamic taking hold around Dripping Springs, Wimberley, and Driftwood.
Why We’re Optimistic About 2026
We’re watching what we call a trifecta of tailwinds that could set up a more balanced market next year:
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Easing monetary policy from the Federal Reserve is helping to stabilize financing costs.
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Loan-level price adjustments—many lingering since the 2008 financial crisis—are being phased out, slightly reducing the cost of new mortgages.
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Jerome Powell’s departure as Fed Chair in May could mark a shift toward a more growth-friendly policy tone.
With these factors aligning, it’s not unreasonable to imagine mortgage rates in the 5%–5.5% range by mid-2026. That’s higher than the record-low 2020-2021 era, but still attractive by historical standards—and it could help bring the market back into equilibrium.
A Healthier, More Confident Market Ahead
If 2026 brings both motivated buyers and realistic sellers back into balance, that would be an encouraging sign for the entire Hill Country housing market. Stability, confidence, and healthy transaction volume could define the next phase for Dripping Springs real estate.
At NestHaven Properties, we believe that shift is already beginning—and while we can’t predict the future with certainty, the early indicators are pointing in the right direction.
