The Austin-Round Rock MSA housing market is outperforming national trends while continuing to balance, according to the Austin Board of REALTORS® April 2023 Central Texas Housing Market Report. The most recent National Association of REALTORS® data (March 2023) found that home sales declined 22.7% nationally while in Central Texas, they declined 14%, demonstrating resilience of the region’s economy.
“For several months, the Austin-area housing market has been balancing as REALTORS® continue to help clients on both sides of the transaction navigate this market effectively,” Ashley Jackson, 2023 ABoR president, said. “This is still a market that is seeing lots of activity, just not at a record-setting pace, and that is to be expected given broader economic trends. Home prices are moderating, pending sales are holding strong and homes on the market last month are selling closer to list price. These are all signs of a market that is still balancing and doing so in a healthy way.”
Last month, Austin-Round Rock housing inventory increased 2.4 months to 3.2 months of inventory, and homes spent an average of 71 days on the market, up 53 days from April 2022. The median home price fell 15.1% to $466,705 while residential home sales also declined 18.8% year-over-year to 2,611 closed sales and sales dollar volume dropped 29.3% to $1,545,088,361. New listings declined 10.6% year-over-year to 4,115 listings while pending sales rose 0.2% to 3,267 transactions.
Dr. Clare Losey, housing economist for ABoR, provided an analysis of how economic factors are impacting the housing market.
“Inflation, the near doubling of mortgage rates, fear of a recession, and, most recently, stress in the banking system have all contributed to declines in home prices nationally. In Austin, robust job and population growth have mitigated these effects on homebuyer demand, favorably indicating that our region’s economy and housing market continue to outperform national economic trends. Austin remains resilient and able to withstand broader economic turbulence more effectively.”
Losey added that the moderation in home prices continues to offset the decline in affordability induced by higher rates. Without such moderation, fewer buyers, particularly first-time buyers, would be able to attain homeownership.
“Overall, the balancing of the market is beneficial for the broader Austin economy. As inflation decelerates and there are concerns over a potential recession, mortgage rates should decline slightly later this year and into 2024. Meanwhile, over the past year, wage growth in the Austin-Round Rock MSA has outpaced that of the nation. These factors, combined with the moderation in home prices, will improve Austin’s housing affordability long-term, allowing more potential buyers to eventually enter the market.”
“A normalizing housing market, along with more inventory, is unequivocally a good thing for buyers, especially first-time buyers,” added Jackson. “Many Central Texas households would not have been able to attain homeownership had our market continued to experience record-breaking year over-year gains in home prices.”
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