RGV Housing Market Update: Inventory Rises, Labor Shocks, and Market Cooling

The Rio Grande Valley housing market, once one of Texas' most affordable and fastest growing regions, is entering its most complicated and uncertain period in a decade. A combination of rising inventory, softening prices, slowing buyer demand, elevated interest rates, high property taxes, shrinking short-term rental margins, and sudden construction labor disruptions is reshaping the landscape from McAllen to Brownsville. 

Realtor.com: Buyers Are Now Looking Outside the Valley

A June 2025 analysis by Realtor.com highlighted what local brokers have begun to feel on the ground that demand in McAllen is cooling. The median single-family home price has hovered near $260,000–$280,000, while active listings have surged, bringing inventory to levels not seen in years. This marks a sharp shift away from the tight, seller friendly conditions of the pandemic era. Buyers who once migrated to the Valley for affordability are now expanding their searches outside the region altogether. That outward migration is a reversal of the 2021–2023 trend, when families priced out of Austin and San Antonio sought relief in Hidalgo and Cameron counties. 

Ten Straight Months of Rising Inventory

The most recent data from the Greater McAllen Association of Realtors (GMAR) confirms what analysts are calling a “systematic loosening” of the market. Active single-family listings are rising consistently, reaching 2,974 in October (up from 2,444 in January). Months of Inventory climbed from 7.7 in January to  9.3 months in October, the highest level of the year. Median Price is fluctuating, landing at $249,900. A 9.3 month supply strongly signals an oversupply territory, where downward price pressure becomes likely. The Brownsville–Harlingen–SPI market is showing similar patterns. Inventory has hovered between 6.5 and 6.8 months all year elevated but not spiking as sharply as McAllen. Combined, the two major regional zones indicate a broad softening that cannot be dismissed as merely seasonal. 

High Interest Rates + High Property Taxes = Stretched Buyers

For many Valley families, the challenge isn’t just finding a home  it’s being able to afford one. Mortgage rates remain elevated, and the Rio Grande Valley continues to shoulder some of the highest property tax burdens in Texas. Rising appraisals have intensified the pressure on homeowners. While state leaders proposed additional property tax reforms during the most recent special legislative session, lawmakers were unable to reach an agreement before adjournment. As a result, Texans head into 2026 with no new tax cuts, continued valuation increases, and higher operating costs for both homeowners and investors. Several tax relief measures did pass earlier in the regular session including higher homestead exemptions but the most recent special session failed to deliver the broader reforms that Governor Abbott had pushed for, leaving key relief efforts unresolved.

Short-Term Rental Softening:

While not yet triggering a wave of sell-offs, Airbnb and short-term rental operators across the Valley are experiencing a "margin squeeze." Higher insurance and cleaning costs are colliding with declining off-season occupancy and fewer long-term winter visitors. Analysts warn that if shrinking margins continue, investors could start placing STR properties on the resale market adding even more supply to a system already in a 10-month upward climb. 

ICE Raids Disrupt Construction Labor 

Compounding market pressures is a new and unexpected shock: a wave of unannounced ICE raids at construction sites in McAllen, Brownsville, and South Padre Island. The South Texas Builders Association (STBA) reports that agents have detained workers including U.S. citizens and legal visa holders for hours before releasing them, creating uncertainty and fear across job sites.

STBA Executive Director Mario Guerrero issued a blunt warning: “Our businesses are hurting. There’s no labor. This could ruin the housing market.”

The practical impact is immediate. Projects are stalling, timelines are slipping, and builders are now grappling with a suddenly unstable labor supply at a moment when the Valley’s housing dynamics are already fragile.

A Market at an Inflection Point

The question is no longer whether the RGV market is cooling. It is. The question now is how sharply the next phase will unfold. Economists say the Valley is entering a period of adjustment, not collapse. But with the era of runaway growth over, the  era of recalibration has officially begun.