Austin Housing Market Driven by Job Growth and Mortgage Rates
The Austin-Round Rock Metropolitan Statistical Area (MSA) housing inventory reached 3.0 months in March, according to the latest Central Texas Housing Report by the Austin Board of REALTORS® (ABoR). This means that it would take 3.0 months to sell all the homes currently listed for sale, based on the current pace of sales. While this figure is higher than the historically low inventory levels seen in previous years, it still indicates a seller’s market, as a balanced market typically has 6.0 months of inventory.
However, the report also reveals that the Austin housing market is currently offering favorable conditions for both buyers and sellers. There were 4,385 new residential listings in March, an increase of 6.6% from the same month last year. Additionally, active listings surged by 377.7% to 8,059 listings, representing a threefold increase from the previous year. This means that homebuyers now have three times more options than they had a year ago, which is the highest level of supply in over a decade.
The increase in supply is accompanied by a healthy pace of sales, as REALTORS® report being busy and the market moving in a much healthier manner than before. However, pending sales declined by 7.4% to 3,046 transactions in March, and homes spent an average of 80 days on the market, up from 58 days in March 2022. Residential home sales also declined by 14.0% year-over-year to 2,804 closed sales. The median price also declined by 13.5% to $450,000, and sales dollar volume dropped by 24.9% to $1,580,024,101.
Dr. Clare Losey, ABoR’s first housing economist, commented on the ongoing strength of Central Texas’s housing demand. She noted that Austin’s housing market is still demand-driven, contributing over $1.5 billion to the region’s economy last month, even as the pace of home sales and price growth normalizes from the extreme anomaly of the last two years. The recent increase in new listings, specifically month over month, indicates rising seller confidence, while the recent decline in mortgage rates provided momentum for homebuyers. Mortgage rates are projected to remain stable for the rest of the year, making it a good time to consider buying a home.
Despite recently announced layoffs, Austin’s job market is projected to grow at nearly double the pace of job growth statewide over the next decade, with the leisure and hospitality sector leading that growth. This reinforces the need for local leaders to make housing their top priority, particularly in ensuring that Austin’s rising housing supply leads to all types of housing, at all price points, in all areas of Austin.
In summary, the Austin-Round Rock housing market is currently offering favorable conditions for both buyers and sellers. There are more homes on the market than ever before, which gives homebuyers more choices and opportunities. Additionally, the increase in new and active listings suggests that the region’s housing demand remains strong. Moreover, with mortgage rates projected to remain stable throughout the year, it is an excellent time for homebuyers to take action. However, housing affordability remains a challenge for working-class families, and local leaders must prioritize housing development that caters to all types of housing at all price points in all areas of Austin.
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