Austin Housing Market Report September 2024

Staying informed about the Austin housing market is crucial whether you're looking to buy or sell. With fluctuating mortgage rates, changing inventory levels, and shifting buyer demand, making informed decisions is essential in this dynamic environment. In this blog, we'll dive into the latest trends, analyze key indicators, and discuss what these changes mean for you.

In September, the median home price in the Austin-Round Rock-San Marcos housing market dropped by 6% to $425,000, while pending sales surged by 20% year-over-year, according to Unlock MLS’ September 2024 Central Texas Housing Report. With inventory reaching 5.9 months, the market is now a buyers market, though affordability remains a challenge. The increase in pending sales is likely driven by the mid-September dip in mortgage rates, as buyers present offers quickly to take advantage of more favorable conditions.

“Sellers are adapting their pricing strategies as buyers gain more negotiating power, largely due to longer days on market and decreasing median sales price,” says Jennifer Korba, Agent Success Manager at Realty Austin Compass. “Even with a dip in mortgage rates and a rise in available homes, affordability continues to be a major obstacle for many buyers in the area.”

Let's take a closer look at the latest trends from September and what they mean for you:

• Homes actively for sale rise – the number of homes on the market has risen by 11% compared to last year, giving buyers more options.
• Home prices decline—Median home prices are now at $425K, down 6% from last year and 3% from last month.
• Time on the market increases — Homes are now on the market for an average of 79 days, up 10 days from last year; however, Realty Austin Compass listings average 45 days on the market.
• Buyer demand increases— Pending sales increased by 20% compared to last year.
• Home sales decline — Home sales decreased by 2% compared to last year and 11% from last month.
• Housing supply and inventory — Housing supply stands at 5.9 months, up 1.3 months from last year.
• Current market snapshot — Over 12,000 homes are for sale, selling at an average of 93% of their original list price. Realty Austin Compass listings, however, sell on average for 97% of their original list price.  

Should You Buy Now or Wait?

Many potential homebuyers and sellers are hesitant, hoping to time the market perfectly. Common concerns include waiting for mortgage rates to drop or expecting home prices to rise before selling. While the market has been unpredictable, current conditions may present a unique opportunity.

"It’s been a challenging market over the last few years, and many buyers and sellers are waiting for ‘perfect conditions’—but the reality is, now may be the sweet spot," explains Tom Thornton, Agent Success Manager at Realty Austin Compass.

With home prices projected to rise over the next five years, buyers who act now stand to gain significant equity. According to Fannie Mae's Home Price Expectations Survey (HPES), homeowners could see around $90,000 in equity growth during that time. Waiting for the “perfect moment” could mean missing substantial wealth-building opportunities.

What’s Ahead for 2025?

Looking ahead to 2025, the forecast offers promising insights into two key areas: mortgage rates and home prices. According to the MBA Mortgage Finance Forecast, experts anticipate that mortgage rates will start easing next year, improving affordability for buyers. This decline won’t happen overnight, but the trend is expected to decline.

"Lower financing costs will likely boost demand by pulling affordability-crunched buyers off the sidelines," says Charlie Dougherty, Director and Senior Economist at Wells Fargo.

While mortgage rates are expected to drop, home prices will rise more slowly, with a national average growth of 2.5% in 2025. This is a welcome change from recent years of double-digit price increases. Depending on local demand and supply, some regions may see faster or slower appreciation.

What Does This Mean for You?

These trends are helpful, but it’s essential to remember that real estate is local. "Some areas may see slower gains, while others could see elevated appreciation, so working with a local expert is crucial to understanding your market," says Amanda Dudley, Agent Success Manager at Realty Austin Compass.

Mortgage Rates Near 6.9%: Will They Stay There?

After briefly dipping to 6.24% in late September, mortgage rates have climbed to the high 6’s. The recent rate hikes are no surprise, as experts had anticipated these fluctuations. The U.S. economy continues to show resilience, particularly in job creation, contributing to higher borrowing costs, and working with a lender can help you better understand your financing options during these rate changes.

“Mortgage rates typically move in tandem with Treasury yields, and the outlook suggests rates will remain above 6% for the rest of the year. With mortgage rates expected to decline and home prices growing slower, 2025 could bring more opportunities for buyers and sellers. However, affordability challenges persist, so it's essential to work closely with a local real estate expert who can help you navigate these changing conditions,” explains John Coake, Vice President of Sales at Realty Austin Compass.

Your Moves Inspire
At Realty Austin Compass, your moves inspire us to guide you through your real estate journey. Our agents 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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