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: 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. Most striking: 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: A Clear Shift

 The most recent data from the Greater McAllen Association of Realtors (GMAR) confirms what analysts are calling a “systematic loosening” of the market. Active 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 is no longer just finding a home it’s affording one. Mortgage rates remain elevated, and the Valley continues to carry one of the highest property tax burdens in Texas. This cost pressure has become severe as appraisals climb. Legislative Update: Governor Greg Abbott’s proposed property-tax reforms were added to the most recent special legislative session, but lawmakers failed to reach an agreement before adjournment. The session’s collapse leaves residents facing 2026 with: No new tax cuts, rising valuations, and increased operating costs for homeowners and investors. 

Short-Term Rental Softening: Airbnb Margins Begin to Crumble

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. 

A Sudden Wildcard: ICE Raids Disrupt Construction Labor 

Compounding market pressures is a new, unexpected shock. The South Texas Builders Association (STBA) reports a wave of unannounced ICE raids at construction sites in McAllen, Brownsville, and South Padre Island. Builders say agents have detained workers including U.S. citizens and legal visa holders for hours before releasing them, creating fear across the industry. STBA Executive Director Mario Guerrero warned: “Our businesses are hurting. There’s no labor. This could ruin the housing market.” 

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.