Homebuyers in Austin Remain Undeterred by High Interest Rates
Austin’s housing market is displaying remarkable resilience, as revealed by the latest report from the Austin Board of Realtors (ABoR). According to ABoR, stability in the Austin-Round Rock housing market started in July 2022, and if current trends continue, a strong finish is expected in 2023.
ABoR President Ashley Jackson stated, “We now have a clear year-over-year comparison indicating when our market began stabilizing, and the previously observed significant fluctuations are now evening out. Prospective buyers who have been hesitant should take note that interest rates are settling, making this the opportune time to make a move.”
Despite interest rates becoming more favorable, affordability remains a substantial challenge for potential buyers. ABoR’s housing economist, Dr. Clare Losey, highlighted that in 2023, the median family income in the Austin-Round Rock metropolitan statistical area (MSA) is $122,300, which falls short in affording many homes available on the market.
Dr. Losey remarked, “This implies that buyers can typically afford homes priced between $300,000 to $400,000. However, less than 40 percent of homes sold in the Austin-Round Rock MSA in July of this year fell within this price range. ABoR’s housing market data for July emphasizes the persistent and robust demand for housing in our region, highlighting the urgent need for more housing inventory across all price points.”
The real estate report for June emphasized the need for increased housing inventory, a trend that carried into July. Active listings in the MSA experienced a 13 percent increase to 9,663 last month, reflecting a slow yet consistent improvement throughout the year.
Dr. Losey pointed out the decreasing likelihood of Central Texas experiencing a recession, attributing this to Austin’s strong labor market. Despite rising mortgage rates, she predicted that the region will continue to surpass national expectations, as indicated by the rising number of pending and closed sales.
Median home prices in the Austin-Round Rock MSA dropped to $462,000, signifying a year-over-year decrease of 10 percent from July 2022. Furthermore, homes are spending an average of 59 days on the market, extending the duration by 37 days compared to the same period last year.
Travis County experienced a significant decline in July 2023, with over 1,300 homes sold. Median prices recorded a year-over-year drop of 9.2 percent, settling at $545,000. Active listings in the market currently amount to 4,697, showing an increase of approximately 16 percent compared to July 2022.
In July, Williamson County observed a relatively lower number of homes sold, with fewer than 900 transactions. Median prices in the area were recorded at $428,350. The county boasts over 1,200 new home listings, contributing to a total of 2,788 active home listings.
Hays County witnessed the sale of exactly 400 homes in July. Median prices continued their downward trend, falling to $405,243. Interestingly, pending sales experienced a significant year-over-year increase of 27.3 percent, while active listings rose by 31.1 percent, reaching a total of 1,493.
Bastrop County currently holds the highest inventory in the MSA, boasting 4.6 months’ worth of supply. This figure represents an increase of 1.2 months compared to July 2022. In July, 132 homes were sold in the county, with median prices just under $350,000, reflecting a decrease of 15.7 percent. Active listings in Bastrop County increased by 25.6 percent, resulting in a total of 545 homes available on the market.
Homes in Caldwell County sold for a median price of $298,048 in July, marking a substantial year-over-year drop of 20 percent. The county witnessed the sale of 44 homes, representing a nearly 23 percent decrease compared to the previous year. Currently, there are 140 active homes available on the market in Caldwell County.