The Great Disconnect: Why San Antonio’s Mortgage Market is Quieter Than It Looks

If you look at the headlines for the San Antonio housing market in early 2026, you might see big numbers. Total dollar volumes are up, and the average home price in the Alamo City is hovering near $380,000. On paper, it looks like a booming economy.

But there is a "ghost" in the data.

While the dollars are flowing, the units—the actual number of families successfully closing on a mortgage—tell a much different story. We are currently living through a historical anomaly where the "velocity" of the market (how many homes actually change hands) is at its lowest point in decades. To understand where we stand in January 2026, we have to look past the price tags and count the keys.

The Unit Collapse: A Historical Perspective

To find a time when mortgage unit volume was this low, you have to go back to the aftermath of the 2008 financial crisis.

In the mid-2000s, the U.S. was originating over 12 to 15 million loans per year. Even during the post-crash "recovery" years of 2011, the industry was moving about 6 million units. Fast forward to the 2021 pandemic boom, and that number rocketed back to 13.6 million units as everyone with a pulse refinanced into a 3% rate.

Then came the "Great Freeze" of 2023–2024. National unit volume plummeted to roughly 4.9 million. As of January 2026, the Mortgage Bankers Association (MBA) and other industry analysts project a slight recovery to roughly 5.8 million units for the year.

The reality? We are doing fewer loans today, with a much larger population, than we were during the "bad years" of 2011.

San Antonio: The Unit vs. Dollar Mirage

In San Antonio, this disconnect is even more startling. Traditionally, San Antonio has been a high-volume market because our homes were affordable. If you had a pulse and a steady job at USAA or H-E-B, you could get a house.

In 2021, the San Antonio MSA saw over 52,000 loan originations. By 2024, that number had cratered to approximately 31,000 units. Even as we enter 2026 with rates finally easing into the low 6% range, we are on track for only 35,000 units.

Why does the market feel like it’s doing okay? Inflation.

In 2019, a $1 billion month in San Antonio required roughly 4,500 families to buy a home.

In 2026, because prices have surged, it only takes roughly 3,200 families to reach that same $1 billion.

The "volume" is there, but the participation is gone. Thousands of San Antonians have been pushed to the sidelines, and the industry is surviving on fewer, more expensive transactions.

New Construction: The Only Engine Left

There is one sector in San Antonio that is "cheating" the trend: New Construction.

According to recent data from the San Antonio Board of Realtors (SABOR) and local MLS feeds, new home sales now account for nearly 40% of all closed units. Historically, that number was closer to 15%.

Builders like Lennar and D.R. Horton have effectively become the "central bank" of San Antonio. While a regular homeowner in Stone Oak is trying to sell their house with a market interest rate of 6.2%, builders are offering permanent rate buy-downs as low as 4.99%.

This has created a two-tier market:

The Resale Market: Stagnant, with units sitting for 75+ days because sellers won’t budge on price and buyers can’t afford the 6%+ rates.

The New Build Market: Active, because builders are using their massive profit margins to "buy" the buyer's interest rate down to 2021 levels.

The Military Factor: VA Loans to the Rescue?

San Antonio’s saving grace has always been its military population. In 2025, VA loan originations saw a significant rebound, with unit volume increasing by over 25% year-over-year (Veterans United).

As we move through January 2026, the VA IRRRL (Interest Rate Reduction Refinance Loan) is finally making a comeback. For the first time in three years, the "Refi" is no longer a dirty word. Veterans who were forced to buy at 7.5% in late 2023 are finally seeing a window to drop their rate by 1% or more. This is providing a much-needed "floor" for unit volume in neighborhoods near Lackland, Fort Sam Houston, and Randolph AFB.

Where Do We Go From Here?

As of January 2026, San Antonio is in a state of "Balanced Stagnation." With 5.25 months of inventory, we are no longer in the "Hunger Games" bidding war era of 2021. However, we are also not in a crash. We are in a slow, grinding recovery where "success" is defined by simply matching the unit counts of 2012.

The "strong decline" the user mentioned is real. We are moving fewer units than almost any point in the last 30 years when adjusted for population growth. Until mortgage rates drop low enough to unlock the "golden handcuffs" of homeowners sitting on 3% rates, the resale market will continue to be a game of musical chairs with very few chairs.