Austin Housing Market Report December 2024

The 2024 housing market in the Austin-Round Rock-San Marcos MSA showed stability, paving the way for a steady 2025. Experts forecast similar conditions in 2025, with median sales prices and closed sales expected to fluctuate within a manageable 5% range year-over-year. Mortgage rates are projected to remain between 6-7%, offering a consistent and predictable lending environment.

Here’s what buyers and sellers should know heading into the year:

• Homes Actively for Sale Rise: The number of homes for sale in December rose  10% year-over-year, offering buyers more options, but are down 21% from last month due to normal seasonality..
• Home Prices Steady: Median home prices remain stable at $450K, up 1.4% from last year and 3% from last month, signaling continued demand.
• Time on the Market Stabilizes: Homes are spending an average of 80 days on the market, unchanged from last year but up 5 days from last month. Realty Austin Compass listings averaged just 57 days, selling 23 days faster than the market average.
• Buyer Demand Increases: Pending sales increased 3% year-over-year, though they decreased 10% from last month due to typical seasonality.
• Home Sales Increase: Sales rose 2.5% year-over-year and 8% month-over-month, reflecting stronger buyer confidence as inventory increases.
• Housing Supply Steady: Housing inventory stands at 3.8 months, up 0.8 months from last year, indicating a steady, balanced market.
• Market Snapshot: Over 8,000 homes are currently on the market, selling for an average of 92% of their original list price. Realty Austin Compass listings sold for an average of 97% of their original list price.

Mortgage Rates: Is Relief Coming for Homebuyers?
Mortgage rates recently climbed above 7% for the first time in eight months but showed a slight decline last week, with the 30-year fixed rate averaging 6.96%, according to Freddie Mac. However, relief may be on the horizon. Federal Reserve Governor Christopher Waller recently indicated that rate cuts could arrive as early as spring, with investors now anticipating a potential reduction by March if inflation trends continue to improve and the labor market remains strong. 

“We anticipate mortgage rates will stabilize in the latter half of January. Even a slight decrease could impact monthly payments, making homeownership more accessible for many buyers,” says Amanda Dudley, Agent Success Manager at Realty Austin Compass.

Inventory Levels on the Rise: A More Balanced Market
A promising trend for 2025 is the increase in active housing inventory, with new single-family home listings rising by 9% compared to last year. This influx of inventory marks a shift toward a more balanced market, offering more choices for buyers. 

“As spring listing season approaches, utilizing our 3-phased marketing strategy can give sellers an edge in a competitive listing landscape,” says Tom Thornton, Agent Success Manager at Realty Austin Compass. “This pre-marketing approach extends your marketing runway, helping ensure your home enters the public market with maximum demand and a refined pricing and positioning strategy — setting the stage for the best possible sale outcome.”

Home Prices: Moderation Expected, Growth Likely to Continue
Home prices are expected to rise moderately in 2025, with a projected increase of 3-4% on average, signaling a return to more sustainable growth. Fannie Mae sees home prices rising 3.6% year over year in 2025. While some regions may see price dips, most will continue to experience appreciation due to the ongoing imbalance between supply and demand, with inventory growth helping to ease some of the pressure.

"Despite higher mortgage rates, it’s unlikely that home prices will face a sharp decline," says Jennifer Korba, Agent Success Manager at Realty Austin Compass. "Sustained demand is expected to push prices steadily upward as we head into our spring market."

The Rise of International Buyers: A Global Investment Destination
Central Texas remains an attractive destination for international buyers, who injected $618 million into the local housing market from April 2023 to March 2024. Buyers from countries like Mexico, India, and Canada contributed to a 2% increase in foreign transactions, further bolstering Austin’s appeal as a global investment hub.

"Central Texas is rapidly establishing itself as a global real estate hotspot," says John Coake, Senior Vice President, Realty Austin Compass. "With a growing economy, affordable living, and a vibrant metro area, the region continues to draw international interest, driving demand in the housing market."

Buyer Demand Persists: Homes Are Selling Every Day
Despite rising mortgage rates and home prices, buyer demand remains strong, with a 2% increase year-over-year in closed sales. Motivated by life events like job relocations or family milestones, buyers will continue to search for their ideal home. 

"Life changes like a job transfer, marriage, or growing family keep buyers engaged, and they are finding success in today’s market," explains Thornton. 

The Impact of Home Equity: Unlocking Wealth Through Homeownership
Home equity is a powerful financial tool, with the average equity for homeowners reaching a record high of $319,000 nationwide. As home prices have surged by nearly 57% over the past five years, many homeowners are tapping into their equity to fund future goals, such as lifestyle upgrades or home renovations.

"Homeownership offers more than just a place to live; it’s a pathway to building wealth," says Dudley. "By leveraging home equity, homeowners can unlock opportunities and secure their financial future."

What Does This Mean for Buyers and Sellers?
Market dynamics are evolving, but buyers and sellers can succeed in the 2025 housing market with the right support. Home buyers and sellers will find a more balanced environment as inventory levels rise and home prices moderate. Whether buying your first home, selling, or exploring options, staying informed on these trends will give you a competitive edge.

Your Moves Inspire
At Realty Austin Compass, we’re closely monitoring the market to provide the most up-to-date insights and strategies. Your moves inspire us to help you navigate market trends, decode pricing dynamics, review contracts, and leverage negotiation skills to secure the best outcome for you. Connect with one of our local agents today to confidently navigate your next move.

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