Austin’s luxury home market recorded a 1.4% year-over-year price decline in July 2026, with the median sale price for homes priced at $1 million or more falling from $1.35 million in July 2025 to $1.331 million this July, according to data released yesterday by Eleven Oaks Realty. Meanwhile, Travis Central Appraisal District reported that single-family residences across the county saw an average 1.8% decline in appraised market value for the 2026 tax year.
But homeowners hoping for lower property tax bills this fall may be disappointed. Under Texas law, a decline in your home’s appraised value does not automatically translate into a lower tax bill—and in many cases, taxes can still rise even when home values drop. The reason lies in how Texas property taxes are calculated: your share of the total tax burden depends not just on your home’s value, but on the budgets set by cities, counties, school districts, and other local taxing entities.
The disconnect between falling home prices and stubborn tax bills is now front and center for Austin-area homeowners, who face some of the highest property tax rates in Texas and a market that has cooled significantly from its 2022 peak.
The numbers
What the July data shows
Prices are down across most segments, but the declines vary widely by price tier and geography.
For the Austin metro area as a whole—covering Travis, Williamson, Hays, Bastrop, and Caldwell counties—the median sales price in July 2026 was $435,000, up 1.0% from July 2025, according to Unlock MLS, the multiple listing service operated by the Austin Board of Realtors. The metro saw 2,739 residential homes sold in July, a 4.4% increase year-over-year, and total dollar volume climbed 6.9% to more than $1.6 billion.
But drilling into specific segments tells a more nuanced story. Inside the city of Austin itself, the median sold price for single-family homes in July was $603,750, down 2.8% from July 2025, according to a detailed market report from Eleven Oaks Realty. The median price per square foot in the city fell 1.0% year-over-year to $295. Homes spent a median of 48 days on the market in July, double the 24 days recorded in June, reflecting the typical seasonal summer slowdown.
The luxury segment—homes selling for $1 million or more—saw 275 transactions in July, up 18.5% from the 232 sales in July 2025. The median luxury sale price of $1.331 million was down 1.4% from $1.35 million a year earlier. Travis County recorded the highest median price at $520,000 for homes on the market in July, while Caldwell County posted the lowest at $254,000, down 16.4% year-over-year.
Key July 2026 figures
$435,000: Median sale price across the Austin metro, up 1.0% year-over-year
$603,750: Median sale price inside the city of Austin, down 2.8% year-over-year
$1.331 million: Median luxury home price (homes $1M+), down 1.4% year-over-year
2,739: Total homes sold in the metro in July, up 4.4% from July 2025
48 days: Median days on market for city of Austin homes in July
4.7 months: Months of housing inventory in the Austin metro as of July 2026
The appraisal disconnect
Why lower home values don’t guarantee tax relief
Texas property taxes are based on budgets, not just your home’s value—and that’s a critical distinction.
On April 21, 2026, the Travis Central Appraisal District (TCAD) began releasing 2026 market values to property owners. The official numbers: overall property values in Travis County increased 5.48% to $482 billion, driven primarily by increases in healthcare, industrial, and office commercial properties. But single-family residences saw an average 1.8% decline in market value. The median market value for a residential homestead property in Travis County for 2026 is $493,449, with a median taxable value of $384,747.
Here’s the catch: those declining appraisals don’t automatically mean your tax bill will fall. As TCAD itself explained in its April announcement, “These changes in market values will not directly translate into changes in property tax bills. Instead, values determine a property owner’s share of the total tax levy, which is determined by the annual budgets of local taxing entities—such as cities, counties, and school districts.”
In plain English: if your home’s value drops 2%, but your neighbor’s drops 5%, your share of the total tax burden actually increases—even though your home is worth less. And if local governments raise their budgets or tax rates, your bill can climb regardless of what happened to your appraisal. The typical Austin homeowner now pays an effective property tax rate between 1.97% and 2.07% of assessed value, depending on which school district and municipality they fall within. On a $500,000 home, that works out to roughly $10,350 per year before exemptions.
Texas does offer some protection through the homestead exemption, which caps annual increases in your home’s taxable value at 10% if you live in the home as your primary residence. The 89th Texas Legislature raised the school district homestead exemption from $100,000 to $140,000 in 2026, and increased the additional senior and disabled homeowner exemption from $10,000 to $60,000. For a homeowner over 65 in Austin, those two exemptions alone remove $200,000 from the school district’s taxable calculation—roughly $1,851 per year in school tax savings at Austin ISD’s current rate. But even with those exemptions, property taxes remain one of the largest recurring costs of homeownership in the Austin metro. Learn more about buying a home in Texas and the state’s unique property tax landscape.
The math behind the disconnect
Your property tax bill = (Your home’s taxable value) × (Combined tax rate of all taxing entities). If all home values in your area drop by the same percentage, tax rates typically rise to fund the same government budgets, leaving your bill roughly flat. If your home’s value drops less than the average, your share of the burden increases. Only if your home’s value drops more than average—or if local governments cut their budgets—will you see meaningful relief. The 10% homestead cap protects you from sharp increases, but it doesn’t prevent taxes from rising when your home’s value is already high.
What it means
The Austin market in context
Prices remain well below the 2022 peak, but the correction has been uneven and slow.
Austin home prices peaked in May and June 2022, when the median sale price hit approximately $550,000. Since then, the market has declined roughly 18% to 20% depending on the measure and geography. The July 2026 median of $435,000 for the metro area is now below the $460,000 recorded in August 2021, effectively erasing more than a year of pandemic-era appreciation.
The slowdown has been driven by a combination of factors: mortgage rates that remain near 6.8% as of mid-2026, a surge in new construction that added inventory, and a sharp decline in net migration to Austin compared to the 2020-2022 boom years. According to multiple local real estate analysts, Austin’s market is now projected to take until late 2030 to recover to its 2022 peak, assuming a historical compound appreciation rate of around 4.8% per year.
The inventory picture has shifted dramatically. The Austin metro had 4.7 months of housing inventory as of July 2026, up from tighter levels a year ago but still within the range considered a balanced market (typically 4 to 6 months). Caldwell County had the most inventory at 7.7 months, while Williamson County had the least at 4.3 months. Days on market have lengthened, and 56% of listings in the city of Austin had price reductions as of July, signaling that sellers are adjusting expectations.
For buyers, the current environment offers more negotiating room and less competition than at any point since 2020. For sellers, it means pricing accurately from the start is essential—overpriced homes are sitting longer and ultimately selling for less. And for homeowners, it underscores the importance of understanding how property taxes work in Texas, because a cooling housing market does not automatically deliver relief at the tax assessor’s office. If you’re looking for ways to reduce your housing costs, explore affordability strategies and assistance programs that may help.
Take action
What Austin homeowners should do now
Even if your appraisal dropped, protesting may still save you money—and it’s risk-free.
The deadline to protest your Travis County property tax appraisal for 2026 was May 15, or 30 days after TCAD mailed your notice of appraised value, whichever was later. If you missed that deadline, mark your calendar for 2027: protesting your appraisal is one of the highest-return financial moves available to Texas homeowners. According to data from the Texas Comptroller, homeowners who protest win reductions roughly 60% to 70% of the time, with the average reduction in Travis County typically running 5% to 15% of the original appraised value.
Under Texas Tax Code Section 41.43, the Appraisal Review Board cannot raise your value as a result of a protest you filed, so there is zero downside risk. Even if your appraisal stayed flat or declined slightly, you may still have grounds to protest if comparable sales in your neighborhood are lower than your assessed value, or if your property has condition issues—roof damage, foundation problems, outdated systems—that aren’t reflected in the valuation.
Make sure you’ve filed for every exemption you qualify for. The general homestead exemption is free and knocks $25,000 off your home’s taxable value for school district taxes (plus additional amounts for other taxing entities). If you’re over 65, disabled, or a qualifying veteran, additional exemptions can save you thousands of dollars per year. On average, a homestead exemption saves Travis County homeowners about $3,600 annually. You can apply online through TCAD’s website or by mail; the deadline is April 30 of the tax year.
Finally, if you’re considering buying in the Austin area, factor property taxes into your budget from day one. A $500,000 home in Austin ISD will cost you roughly $863 per month in property taxes before you even think about your mortgage payment, insurance, or HOA fees. That’s higher than many buyers expect, especially those moving from states with income tax. Use online calculators to estimate your total monthly housing cost, and ask your real estate agent for the exact combined tax rate for any property you’re considering—it can vary by nearly a full percentage point depending on which side of a school district or city boundary you fall on. For a detailed breakdown of what to expect, see our guide to financing a home purchase and understanding all the costs involved.
Action checklist
Check your exemptions: Log in to traviscad.org and confirm your homestead exemption is in place. If you’re over 65, disabled, or a veteran, verify those exemptions are applied.
Review your appraisal: Compare your 2026 assessed value to recent comparable sales in your neighborhood. If your appraisal seems high, gather evidence now for next year’s protest.
Protest annually: Even a small reduction compounds over time due to the 10% homestead cap. Protesting keeps your baseline low.
Budget for taxes: When house hunting, calculate property taxes at 2% of the purchase price as a rough estimate, then get the exact rate before you make an offer.
Quick answers
Austin home prices and property taxes: common questions
Why didn’t my property tax bill go down if my home’s value dropped?
Texas property taxes are based on your share of the total tax levy, not just your home’s value. If your home’s value dropped less than the average in your area, your share of the tax burden actually increases. Additionally, if local governments raise their budgets or tax rates, your bill can rise even when your appraisal falls. The only way to guarantee a lower bill is if your home’s value drops more than average or if taxing entities cut their budgets.
What is the homestead exemption and how much does it save?
The homestead exemption is a tax break for your primary residence. In Texas, it removes at least $100,000 from your home’s taxable value for school district taxes (raised to $140,000 in 2026), plus $25,000 for other taxing entities. On average, it saves Travis County homeowners about $3,600 per year. You must apply by April 30 of the tax year, and you can file online at traviscad.org or by mailing Form 50-114 to TCAD.
Should I protest my appraisal even if it went down or stayed flat?
Yes. A flat or lower appraisal doesn’t mean it’s correct—it often just means the appraisal district carried last year’s number forward without a detailed review. If comparable sales in your neighborhood are lower than your assessed value, or if your home has condition issues not reflected in the appraisal, you have grounds to protest. There’s zero risk: Texas law prohibits the Appraisal Review Board from raising your value as a result of your protest. Homeowners who protest win reductions 60% to 70% of the time.
How are Austin property taxes so high if Texas has no income tax?
Texas funds local governments entirely through property taxes, sales taxes, and other fees—there is no state income tax. As a result, property tax rates in Texas run about 50% above the national average. The statewide average effective rate is around 1.58%, compared to the national average of roughly 1.02%. In Austin, combined rates typically run 1.97% to 2.07% of assessed value, meaning a $500,000 home generates roughly $10,350 in annual property taxes before exemptions.
When is the deadline to protest my Travis County appraisal?
The deadline is May 15, or 30 days after TCAD mails your notice of appraised value, whichever is later. For 2026, most notices were mailed in April, so the deadline has passed. Mark your calendar for 2027: you can file online through TCAD’s portal at traviscad.org, by mail using Form 50-132, or in person at the TCAD office. Appraisal Review Board hearings typically begin in June.
Are Austin home prices expected to keep falling?
Most local analysts expect Austin prices to stabilize near current levels rather than fall sharply from here. The market has already declined roughly 18% to 20% from the May 2022 peak, and inventory has begun to tighten slightly. Projections suggest it will take until late 2030 for prices to recover to the 2022 peak, assuming historical appreciation rates of around 4.8% per year. Much depends on mortgage rates, job growth, and migration trends, all of which remain uncertain heading into late 2026.