El Paso residents are expected to earn and spend more in 2026, setting the stage for increased home and vehicle purchases despite ongoing affordability challenges.
Steady income growth is expected to push El Paso’s economy forward in 2026, with forecasts pointing to higher consumer spending and modest gains across key industries.
El Paso’s per capita personal income is expected to climb to $53,200, according to the “El Paso Top 10 Economic Predictions for 2026” report recently released by UTEP’s Border Region Modeling Project. By comparison, the U.S. per capita personal income is $78,700, and its $68,000 in Texas.
“Although the per capita income figure for El Paso lags behind the rest of Texas and the U.S. as a whole, it does represent progress,” said Tom Fullerton, a professor and economist at the University of Texas at El Paso. “It’s important to point out that in spite of all the headwinds coming out of Washington D.C., and occasionally Austin, the per capita income in El Paso is still climbing.”
Economist Tom Fullerton
While some industry experts, including those in real estate, anticipate growth, others in construction, employment and automobile sales remain cautious as affordability concerns and other external factors persist.
El Paso City Manager Dionne Mack said the economic outlook shows the Sun City is entering 2026 with steady growth. The city’s focus will be ensuring that economic progress creates real opportunities for residents and small businesses, she said.
“The city will continue investing in job training, infrastructure and neighborhood services while supporting local businesses,” Mack said. “Growth matters most when it improves quality of life, and in 2026 our work will remain centered on affordability, stability and long-term economic resilience for El Paso.”
Buying a home is expected to become a bit more affordable this year as interest rates creep down and home construction continues.
The number of new residential construction projects is predicted to exceed 2,600 units for the first time since the pandemic.
“Affordability is improving. It’s not back to pre-pandemic levels, but it is going up,” Fullerton said. “We also have housing sales increasing this year by 11,700 units. That will be the first time since 2022 that this happens.”
The median price for newly built single-family homes is expected to surpass $267,900, and the median price for previously built single-family units will reach about $255,500, according to the report.
Moderately lower mortgage rates are expected to push average monthly principal and interest payments slightly below $2,120.
“This is going to be a year where our median resale housing prices grow a little faster than median new prices,” Fullerton said. “There are going to be households out there that do have the financial wherewithal to make the down payment and qualify for mortgage loans.”
Alex Huereca, president of the Greater El Paso Association of Realtors, said the local real estate market experienced slow growth in 2025.
Huereca, who owns Purple House Real Estate Group and El Paso Renters LLC, said conditions are improving slightly for buyers, though sellers still have an advantage.
The median sales price in El Paso in 2025 was $268,950, a 1.5% increase from 2024, according to the Realtor’s association.
“For buyers, it wasn’t as bad as it was in 2021, when they had to submit multiple offers over the asking price. Now they have a bit more room for negotiation,” he said. “The sellers are still at a good place, if the property is listed on price correctly.”
In December 2025, there were 2,769 residential units for sale, down 12% from November. Closed sales totaled 728, a 21.7% increase from the previous month.
There were 12,164 new listings last year, a 3.9% increase from 2024.
Tony Delgado, the Realtor association’s CEO, said the growing number of listings gives buyers more choices.
“If there’s more inventory to choose from, then the market becomes more competitive,” said Delgado, who previously worked for the El Paso Central Appraisal District for 20 years. “Buyers are pretty set on what they know they can afford, and they’re not going above it.”
Ray Adauto, executive vice president of the El Paso Association of Builders, said confidence is lower for new home construction despite strength in the resale market.
“Land prices are too high, labor is extremely expensive now and so is the price of materials,” Adauto said. “The cost of permits, inspections and other things is just through the roof. It’s not a friendly environment for construction in El Paso right now.”
Adauto said rising costs remain a major obstacle for builders.
“So long as people want to live in a new home, we have the product available for them. Whether they qualify or not, that’s a different story,” he said. “We’re all hoping it’s going to be a great year. I don’t want to sound like a naysayer, but there are issues that have to be fixed, not just right now but for the future.”
Rising income levels are expected to drive increased vehicle purchases, with El Paso County projected to reach 731,000 automobile registrations in 2026.
There were more than 719,000 registrations in 2025, according to the Border Region Modeling Project.
Ronnie Lowenfield, CEO of Casa Auto Group
El Paso Inc. file photos
Ronnie Lowenfield, CEO of Casa Auto Group, said the company plans to focus on sales of more affordable used vehicles this year.
The average price of a new vehicle is more than $50,000 in the U.S., according to Kelly Blue Book, which Lowenfield said is a record high.
“It’s not that people don’t want vehicles, or they don’t see the value. It’s just simply an affordability issue,” he said. “We’re going to be focusing on affordable used cars so that we can meet the demand that is there.”
Casa Auto Group has sold cars in El Paso since 1969.
“We remain optimistic, not only in our offerings but in our community,” he said. “Anytime we do see an increase in wages, we also see an increase in business.”
El Paso’s employment growth is expected to slow in 2026, with the unemployment rate projected to rise to 4.9%, according to the report.
The U.S. Bureau of Labor Statistics reported an unemployment rate of 4.8% for El Paso in September 2025.
“By historical standards, anytime El Paso unemployment is below 5%, it represents a banner year in terms of the overall labor market,” Fullerton said. “Unemployment frequently rises when employment growth slows, and that is what the simulation indicates for 2026.”
Leila Melendez, CEO of Workforce Solutions Borderplex, said manufacturing, construction and energy are expected to see the most job growth this year.
“Given the work we have seen over the last few years in preparing for manufacturing opportunities, I believe some of these jobs will begin to be filled mid-to late in the year,” Melendez said.
She expects the unemployment rate to remain steady, if not improve, but expressed concern about some segments of the workforce. Younger workers may increasingly struggle to find work as the adoption of artificial intelligence reduces the number of entry-level jobs and the number of work-from-home opportunities shrinks.
“I’m also concerned with the over-55 population who did not obtain digital skills,” she said. “Without them, they will have difficulty transitioning out of an entry-level, even mid-level job to another entry-level or mid-level job without some digital skills.”