July's 2024 Housing Report for Austin/Central Texas
Mortgage rates have dropped significantly from nearly 8% last fall to around 6.4%—the lowest in over a year. This decline has unlocked purchasing power for buyers, sparking renewed interest in the market. As mortgage rates decrease, buyers could save significantly on monthly payments. Though this could also increase competition if rates continue to decline. For sellers, this dip in rates may make moving more feasible after being "locked in" by historically low mortgage rates. As John Coake, Vice President of Sales at Realty Austin Compass, notes, “It may take a few weeks for buyers to recognize the opportunity that a sub-6.5% rate presents, but we might see an increase in pending sales as the year progresses. As we move into fall, the combination of lower rates and increased inventory could make this an opportune time for both buyers and sellers to act.”
Let's take a closer look at the latest trends from July and what they mean for you:
Homes actively for sale rises – the number of homes on the market has risen by 20% compared to last year, giving buyers more options.
Home prices decline — Median home prices showed no change from last month at $450K and showed a 2% decrease compared to last year.
Time on the market increases — Homes are now on the market for an average of 63 days, up 4 days from last year, indicating a shift towards a more balanced, buyer-friendly market.
Buyer demands slows— Pending sales decreased by 5% compared to last year and 8% from last month.
Home sales decline — Home sales decreased by 3% compared to last year and by 2% from last month.
Housing supply and inventory — Housing supply stands at 5.1 months, up 1.0 month compared to last year.
Current market snapshot — Over 12,000 homes are for sale, selling for 94% of their original listing price.
Will Buyers Be Motivated by Current Mortgage Rates?
Mortgage rates have recently dipped to their lowest point of 2024, settling around 6.47% for a 30-year fixed rate. This decline is significant considering rates have been higher for most of the year, even surpassing levels seen in 2023 and the past decade. The drop in mortgage rates offers significant savings on monthly payments, but it may also increase competition among buyers if rates continue to decline.
Will Inventory Keep Growing?
Housing inventory has grown by 37% compared to last year, offering buyers more options. However, homes are staying on the market longer, with the average time now at 63 days. This shift indicates a move toward a more balanced market. “While inventory has grown significantly, the pace of growth is slowing, and we may see inventory levels stabilize as we approach the end of the year,” says Jennifer Korba, Agent Success Manager at Realty Austin Compass. “This stabilization means both buyers and sellers need to stay agile and responsive to market shifts.”
Are There Signs of Prices Falling?
Over the past two years, home prices in Austin have remained relatively stable, with no significant appreciation since 2021-2022. “Typically, prices are lowest around the New Year, peak in mid-year, and then decline. We’re likely to see home price gains of 0-3% for 2024, following a similar pattern to 2019,” explains Amanda Dudley, Agent Success Manager at Realty Austin Compass. “Sellers should be mindful of pricing, especially as pending sales are expected to slow, potentially leading to more price reductions.”
Signs of Improving Home Affordability
Over the past couple of years, buying a home has been challenging, but there are signs that affordability is slowly improving. With mortgage rates trending down, home prices rising more slowly, and wages increasing, homeownership could become more attainable as the year progresses. This trend is especially noticeable outside Travis County, where buyers are seeking more affordable options, according to Unlock MLS’ July Central Texas Housing Report. “This movement underscores the importance of correctly pricing homes in today's market.
The Fall Housing Market: 3 Reasons to Move
As the market transitions into fall, there are three key opportunities to consider. First, the increased number of homes for sale provides buyers with a wider selection. Second, builders are motivated to sell, with many offering attractive incentives for buyers. Lastly, mortgage rates have eased, potentially lowering monthly payments and making homeownership more affordable. If you're ready to make a move, now could be an opportune time.
Conclusion:
With fluctuating mortgage rates, changing inventory levels, and shifting buyer demand, making informed decisions is essential in this dynamic environment. Therefore, staying informed about the Austin/Central Texas housing market is crucial whether you are looking to buy or sell.
It is my role to understand my clients' unique situation to where I can educate, guide, and work towards a smooth transaction for each one of my clients. If you are thinking about purchasing or selling, I will love to learn your story and help you achieve your real estate goals.