July 2023 Austin Housing Report
Overview of the Austin Housing Market
The Austin housing market has demonstrated remarkable resilience, maintaining its strength despite the upward trajectory of mortgage rates. While there was a marginal uptick of 0.6% in closed listings compared to the previous year, the market's consistent stability since July 2022 offers encouraging prospects. As the market stabilizes further, prospective purchasers can anticipate a more secure real estate landscape, presenting an excellent chance for those who have hesitated to make a home purchase. This blog delves into the present market dynamics and offers insights into the future of housing in Austin.
Let's start by looking at the important points from July 2023:
The number of homes for sale increased by 12% compared to the previous year, giving more options for people looking to buy a home.
The average days a home stays on the market decreased by 2 days from the previous month, now at 59 days, but it’s 22 days longer than a year ago.
The number of new listings entering the market dropped by 23% compared to the previous year, and dipped 16% from last month, potentially signaling fewer new weekly listings for fall home buyers.
Even though 14% more homes went under contract compared to last year, demand from buyers cooled by 7% compared to last month, which may indicate the market is slowing down.
Home sales went up slightly, less than 1%, compared to the previous year, but sales decreased 10% from the previous month.
The number of available homes in July stayed around the same as the previous month, at 3.7 months, compared to a 2.7 month supply a year ago.
The median home sale price decreased by 10% compared to the previous year, now at $462K. This is a 4% decrease from the previous month, which could give buyers more room to make a purchase.
Homes sold closer to their list price at 94%, compared to 90% in January. This shows sellers might have more power in negotiations.
Right now, there are over 11,000 homes for sale, and more than 5,000 homes have lowered their price in the last month.
Examining the Interplay Between Inflation and Interest Rates
The correlation between inflation and interest rates continues to be a prominent subject in market discussions. The concept of a "soft landing" by the Federal Reserve is garnering attention as market participants analyze the evolving economic landscape. Given the conflicting signals, individuals contemplating home purchases are advised to carefully assess their options and explore various mortgage strategies. Although the current situation appears relatively stable, the uncertainty surrounding the Federal Reserve's actions and the mixed signals create challenges in predicting future rate movements.
Navigating Mortgage Rates and What Lies Ahead
As per the most recent Freddie Mac survey, the 30-year fixed-rate average reached 7.23% during the week of August 25th, following five consecutive weeks of increases from the previous week's rate of 7.09%. These mortgage rates have now reached their highest levels since spring 2002, and they are expected to remain elevated due to a confluence of economic factors. The resurgence of inflationary pressures has prompted forecasts of a rate hike in September, indicative of broader economic robustness driving up the 10-year treasury yield. As treasury yields rise, mortgage rates follow suit. This pattern is anticipated to persist for approximately six to nine months.
The Impact of Getting Your Home's Price Right
According to data on price reductions for July provided by the Austin Board of REALTORS®, almost 90% of homes that were sold in Austin needed their prices adjusted within just a month. This highlights how crucial it is to set the right price for a property that truly reflects its value.
"Homes that are priced accurately generally sell 2.7 times faster compared to those that need a price modification. When we look at different price ranges, a clear pattern emerges: homes that require price adjustments often take more time to sell. By studying local data and trends, both buyers and sellers can make smarter choices to ensure smoother and more successful transactions," shared Jennifer Korba, Central Agent Success Manager at Realty Austin.
Population Growth and Demand
The Promise of Opportunity in Texas
"Texas remains a land of promise. It's become a hub for businesses, generating job openings for many. As a result, we're witnessing more families and investors coming to our region," commented Amanda Dudley, North Agent Success Manager at Realty Austin. The vibrant business environment in Austin is clear from its significant number of new business applications in 2022, earning the city the 21st spot nationally. Amidst this hopeful economic climate, Austin's population growth stands out, as it's among the four Texan cities within the top 15 nationally for growth between 2021 and 2022.
Conclusion
As market conditions continue to evolve, staying informed and adaptable is key for individuals navigating the dynamic landscape of real estate and mortgage rates. Being prepared and having a clear understanding of the interplay between inflation and interest rates will be essential in making informed decisions in the months ahead.
Whether you're buying or selling, having a good grasp of the latest trends and market conditions empowers you to make well-informed choices. Let's begin your real estate journey and let my team and I understand what your real estate goals are so we can create a road map to achieve your goals. You can get in touch by calling 512-788-2629 or emailing me lukeeskew@realtyaustin to schedule a Free / Complimentary Consultation.