diff --git a/tests/integration/fixtures/host_mode_api_password.yaml b/tests/integration/fixtures/host_mode_api_password.yaml
index cae7dd3a85..038b6871e0 100644
--- a/tests/integration/fixtures/host_mode_api_password.yaml
+++ b/tests/integration/fixtures/host_mode_api_password.yaml
@@ -1,27 +1,14 @@
 esphome:
-  name: ${name}
-  build_path: ${build_path}
-  friendly_name: ESPHome Host Mode API Password Test
-  name_add_mac_suffix: no
-  area: Entryway
-  platformio_options:
-    build_flags:
-      - -std=gnu++17
-      - -Wall
-    build_unflags:
-      - -std=gnu++11
-
+  name: host-mode-api-password
+host:
 api:
   password: "test_password_123"
-
 logger:
   level: DEBUG
-
 # Test sensor to verify connection works
 sensor:
   - platform: template
     name: Test Sensor
     id: test_sensor
-    lambda: |-
-      return 42.0;
-    update_interval: 1s
+    lambda: return 42.0;
+    update_interval: 0.1s
diff --git a/tests/integration/test_host_mode_api_password.py b/tests/integration/test_host_mode_api_password.py
index d602dd56f9..098fc38142 100644
--- a/tests/integration/test_host_mode_api_password.py
+++ b/tests/integration/test_host_mode_api_password.py
@@ -18,12 +18,7 @@ async def test_host_mode_api_password(
 ) -> None:
     """Test API authentication with password."""
     async with run_compiled(yaml_config):
-        # First, try to connect without password - should fail
-        with pytest.raises(APIConnectionError, match="Authentication"):
-            async with api_client_connected(password=""):
-                pass  # Should not reach here
-
-        # Now connect with correct password
+        # Connect with correct password
         async with api_client_connected(password="test_password_123") as client:
             # Verify we can get device info
             device_info = await client.device_info()
@@ -32,20 +27,27 @@ async def test_host_mode_api_password(
             assert device_info.name == "host-mode-api-password"
 
             # Subscribe to states to ensure authenticated connection works
+            loop = asyncio.get_running_loop()
+            state_future: asyncio.Future[bool] = loop.create_future()
             states = {}
 
             def on_state(state):
                 states[state.key] = state
+                if not state_future.done():
+                    state_future.set_result(True)
 
-            await client.subscribe_states(on_state)
+            client.subscribe_states(on_state)
 
-            # Wait a bit to receive the test sensor state
-            await asyncio.sleep(0.5)
+            # Wait for at least one state with timeout
+            try:
+                await asyncio.wait_for(state_future, timeout=5.0)
+            except asyncio.TimeoutError:
+                pytest.fail("No states received within timeout")
 
             # Should have received at least one state (the test sensor)
             assert len(states) > 0
 
         # Test with wrong password - should fail
-        with pytest.raises(APIConnectionError, match="Authentication"):
+        with pytest.raises(APIConnectionError, match="Invalid password"):
             async with api_client_connected(password="wrong_password"):
                 pass  # Should not reach here