How are inflation and rising new construction costs impacting the Katy real estate market, and what does that mean for homeowners who are considering selling?
If you’re thinking about selling a home in the Katy area or anywhere in the greater Houston metro, it’s important to understand how inflation and new construction costs are reshaping the Katy market. At The Jamie McMartin Group, led by Jamie McMartin, we help Houston-area sellers navigate these economic shifts strategically, so they can make informed decisions and sell their homes with confidence.
In this article, we’ll explore how rising costs are influencing the Houston real estate market, how Katy homeowners can use this to their advantage, and what steps to take if you’re planning to sell in 2026.
Why cost pressures matter for the Katy and Houston real estate market
Two major forces are shaping real estate in 2025–2026: persistent inflation and higher construction costs. Both directly affect home prices, buyer behavior, and selling strategies in markets like Katy, Fulshear, and the west Houston suburbs.
- Inflation impacts mortgage rates, household budgets, and buyer confidence.
- Construction costs affect what new homes sell for, raising the baseline for pricing throughout the market.
- Resale homes are influenced by both, as buyers compare pre-owned homes with newer, often more expensive, builds.
For sellers, this means understanding where your home stands among these cost trends is essential. At The Jamie McMartin Group, our team uses local data and expert insights to help our clients price and position their homes strategically.
How inflation is influencing home values and buyer behavior
Inflation doesn’t just raise prices at the gas pump, it ripples through every part of the housing ecosystem.
Across the Houston real estate market, inflation influences:
- The cost of building materials and labor.
- Home insurance and property maintenance costs.
- Interest rates, which shape buyer affordability and demand.
According to the Texas Real Estate Research Center, the state’s median home price in early 2025 was around $328,000, a modest year-over-year increase, evidence that inflation has slowed growth but not stopped it. Buyers are more cautious and focused on long-term affordability, while sellers need to demonstrate clear value.
For Katy homeowners, that means:
- Highlighting affordability: Energy-efficient features and low-maintenance materials are increasingly attractive.
- Perfecting presentation: Move-in ready homes gain stronger traction in a cautious market.
- Adopting a smart pricing strategy: Pricing competitively, while showcasing added value, helps attract motivated buyers.
Jamie McMartin and our team work closely with sellers to evaluate not only price trends but also buyer psychology in an inflation-impacted market.
Rising construction costs and what they mean for Katy
While inflation affects consumer confidence, construction costs directly influence home supply and competition.
Recent data shows:
- The average cost to build a home in Texas is now around $440,000, compared to roughly $329,000 for an existing home sale.
- Material prices, labor shortages, and permitting delays continue to raise the cost of building.
- National builders have reported 4–6% annual cost increases, forcing price adjustments on new inventory.
In the Katy market, where new developments like Elyson, Cross Creek Ranch, and Sunterra continue to grow, this dynamic creates both challenges and opportunities.
For sellers of existing homes, the higher price of new construction can actually work in your favor, resale homes become a more affordable and accessible option for buyers who want to avoid the long wait times or higher premiums associated with building new.
What this means for home sellers in Katy
Emphasize move-in readiness
When new construction costs rise, buyers start prioritizing resale homes that are ready to occupy. That means the condition of your home can directly influence its selling timeline and price. Fresh paint, modern lighting, landscaping updates, and small renovations can make a huge difference in the eyes of a cost-conscious buyer.
At The Jamie McMartin Group, we help sellers identify high-impact updates that maximize return, without over-investing before listing.
Position your home against new builds
Many Katy buyers compare your resale home directly to a new home in a nearby master-planned community. To stand out, focus on:
- Location benefits: Proximity to established schools, mature trees, and community amenities.
- Immediate availability: No waiting for construction or final inspections.
- Character and charm: Established neighborhoods often offer larger lots and architectural diversity.
We craft marketing narratives that emphasize these competitive advantages, ensuring your home appeals to both emotional and practical buyer motivations.
Price with strategy, not emotion
While higher construction costs may push up the perceived value of existing homes, overpricing can still cause listings to stagnate. Data-driven pricing is critical.
Jamie McMartin and our team rely on current Katy-area market comps, new build pricing, and buyer behavior analytics to help our clients find the sweet spot, competitive yet profitable.
A seller’s roadmap for success in 2026
If you’re preparing to sell in the Katy or Houston area, here’s how to make these economic trends work for you:
- Schedule a Market Evaluation: Understand how inflation and construction trends are shaping your home’s value.
- Focus on Presentation: Invest in professional staging and photography to stand out online and attract qualified buyers.
- Price with Precision: Work with a Houston Realtor who studies both resale and new construction pricing patterns.
- Stay Flexible: Market conditions shift. Be ready to adjust your strategy if inventory or rates change mid-listing.
- Leverage Expert Guidance: The Jamie McMartin Group provides tailored insights that help sellers time their listings and maximize visibility.
By following this roadmap, you can ensure your home is marketed intelligently, reflecting both market realities and your home’s unique appeal.
Why The Jamie McMartin Group is the smart choice for Katy sellers
Choosing the right Houston real estate agent can mean the difference between a smooth, profitable sale and a frustrating experience.
When you work with Jamie McMartin and our team:
- You get local expertise rooted in Katy, Fulshear, and the West Houston suburbs.
- You benefit from strategic marketing that goes beyond MLS listings, using social media, professional video, and targeted digital advertising.
- You gain access to real-time insights into the Houston real estate market, including how new construction and inflation are shaping buyer expectations.
- You work with a team that values integrity and compliance, following all Fair Housing, RESPA, and Texas Real Estate Commission regulations.
Our mission is simple: to position your home as the clear choice for today’s buyer, and to guide you confidently through every step of the sale.
Turning cost challenges into seller opportunities
Inflation and construction costs may be reshaping the Katy real estate landscape, but they’re also creating openings for well-prepared sellers. The key is understanding where your property fits into the broader Houston market and how to use those insights to your advantage.
If you’re ready to find out what your home could sell for in today’s market, or if you’re just exploring your options, The Jamie McMartin Group is here to help. We’ll analyze your property, review your local competition, and design a customized marketing plan that highlights your home’s value in a market defined by rising costs and buyer demand.
Contact The Jamie McMartin Group today to schedule your complimentary home valuation and discover how we can help you turn today’s market trends into tomorrow’s success.