Austin Housing Market: Trends and Forecast 2025-2026

Thinking about buying or selling a home in Austin? You're probably wondering what's happening with the current Austin housing market trends. In short, while things are still competitive, we are seeing some signs of stabilization. The median sales price in January 2025 for the Austin-Round Rock-San Marcos MSA was $409,765, a slight decrease of 4.7% compared to January 2024. This suggests the wild price increases we saw in recent years are starting to cool off, and that's good news for both buyers and sellers looking for a bit more predictability.

But what does that really mean for you? Let's dive deeper into the details. I've been watching the Austin real estate scene for years, and I'm here to break down the latest data and give you my take on what's happening.

Current Austin Housing Market Trends in 2025:

Home Sales in Austin

Despite some price adjustments, the number of homes actually selling tells a positive story. According to the latest report from the Austin Board of REALTORS®, closed sales in January 2025 were at 1,761, which marks an increase of 1.1% compared to January of the previous year.

This increase in closed sales could indicate that while buyers might be more cautious about pricing, they are still actively purchasing homes.

• Closed Sales: 1,761 (Up 1.1% year-over-year)
• Sales Dollar Volume: $942 million (Down <1% year-over-year)

Home Prices in Austin

Now, let's talk about the factor everyone's watching: home prices. As I mentioned earlier, the median sales price in the Austin-Round Rock-San Marcos MSA is $409,765 as of January 2025. While this is still higher than pre-pandemic levels, the 4.7% decrease year-over-year suggests a shift in the market.

It is important to know that different regions or cities may have different home price trends within the MSA.

• Median Sales Price: $409,765 (Down 4.7% year-over-year)

Are Home Prices Dropping in Austin?

The short answer? It is complicated. While the median sales price has decreased year-over-year, it's important to put that into perspective. We are seeing a correction after the substantial growth of the last few years.

I personally believe that prices are stabilizing more than dropping. Sellers are now more willing to negotiate, and buyers have more options. I don't foresee a major crash, but I also don't expect prices to skyrocket again anytime soon.

Austin Home Prices Compared to the National Median

It's always useful to see how Austin stacks up against the rest of the country. The current national median price (December 2024) is $407,500, with a year-over-year change of +6%. This means Austin's median sales price is slightly above national median prices.

However, the key difference is in the trend. While the national median price is still rising year-over-year, Austin's is slightly decreasing. This signals that Austin's market dynamics are diverging from the national trend.

Here's a quick comparison:

Metric	Austin (January 2025)	National (December 2024)
Median Sales Price	$409,765	$407,500
Year-over-Year Change	-4.7%	+6%

Housing Supply in Austin

One of the biggest stories in the Austin housing market is the increase in housing supply. We've been hearing for years about how low inventory was driving up prices, and that's finally starting to change.

The report reveals that new listings have significantly increased, rising 20.6% year-over-year, totaling 3,690. Active listings have increased by 16.5%, now sitting at 9,616. This increase in inventory gives buyers more choices and more negotiating power.

Months of inventory is a key metric to watch. It represents how long it would take to sell all the homes on the market at the current sales pace. In January 2025, Austin's months of inventory stands at 5.6 months, which is up by 0.9 months compared to the previous year. A balanced market typically has around 6 months of inventory, so we're getting closer to that.

• New Listings: 3,690 (Up 20.6% year-over-year)
• Active Listings: 9,616 (Up 16.5% year-over-year)
• Months of Inventory: 5.6 months (Up 0.9 months year-over-year)

Is It a Buyer's or Seller's Housing Market in Austin?

This is the million-dollar question! The answer, as always, is: it depends. I would say we are moving away from the extreme seller's market we experienced in the recent past and are approaching a more balanced market.

The increased inventory gives buyers more leverage, but demand is still relatively strong, keeping prices from plummeting. Sellers need to be realistic about pricing and be prepared to negotiate.

Factors pointing towards a more balanced market:

• Increased inventory
• Slightly decreasing median sales price
• Sellers are now more willing to negotiate

Key Market Trends in Austin

Let's break down some of the key trends I'm seeing in the Austin real estate market:

• Increased Inventory: As mentioned earlier, the rise in both new and active listings is a significant trend. This is giving buyers more options and easing some of the pressure in the market.
• Slowing Price Appreciation: The days of double-digit price increases seem to be over, at least for now. We are seeing more moderate growth, or even slight price decreases in some areas.
• Longer Days on Market: Homes are staying on the market longer than they were a year or two ago. The average days on market is now 84 days, which is up 3 days compared to January 2024. This means sellers need to be patient and price their homes competitively.
• Negotiation is Back: Buyers have more power at the negotiating table. They're less likely to overbid, and they're more likely to ask for concessions.

Impact of High Mortgage Rates on Austin Housing Market

Mortgage rates play a huge role in the housing market. Currently hovering around 7% (as of February 2025), higher rates impact affordability and can cool down demand.

• Reduced Buyer Pool: Higher rates mean that fewer people can afford to buy a home. This can lead to fewer offers and longer days on the market.
• Impact on Home Prices: High rates can put downward pressure on home prices. Buyers are less willing to pay top dollar when their monthly payments are higher due to interest.
• Refinance Lock-In: Many homeowners who locked in historically low rates in recent years are hesitant to sell, as they would have to give up those low rates. This can further impact inventory levels.

My Take on the Austin Housing Market

I've seen the Austin housing market go through a lot of changes over the years. It's a dynamic and exciting place to be, but it can also be confusing.

Based on the current data and my own experience, here's what I think:

• Austin is still a desirable place to live: Despite the recent cooling, Austin remains a popular destination for people from all over the country. The strong job market, vibrant culture, and beautiful scenery continue to attract new residents.
• Long-term prospects are good: I believe that the Austin housing market will continue to grow in the long term. The region is expected to see continued population and job growth, which will support demand for housing.
• Now is a good time to buy (for the right buyer): If you're financially stable and plan to stay in the area for several years, now could be a good time to buy. You'll have more choices, more negotiating power, and you might be able to snag a good deal.
• Sellers need to be realistic: If you're selling, it's important to price your home competitively and be prepared to negotiate. Don't expect to get the same prices that you would have a year or two ago.

Summary:

The current Austin housing market trends indicate a shift towards a more balanced market. While prices have cooled off slightly and inventory has increased, demand remains relatively strong. Buyers have more options and negotiating power, while sellers need to be realistic about pricing. High mortgage rates are impacting affordability and cooling down demand, but Austin's long-term prospects remain positive. As always, doing your research and working with a knowledgeable real estate professional is key to making informed decisions.

Austin Housing Market Forecast 2025-2026

You're probably wondering about the Austin housing market forecast. Here's the short answer: While we might see some slight dips in the short term, Zillow predicts a modest increase of 0.7% in Austin home values by the end of 2025. Let's dive into what that actually means for you and what to expect in the coming months.

Austin Home Values: Where Are We Now?

As of now, the average home value in the Austin-Round Rock area is around $440,596. That's according to the latest data. We've seen a decrease of about 3.3% over the past year. While that might sound alarming, keep in mind that Austin's real estate market has been on a wild ride for the last few years. Remember the crazy bidding wars? Thankfully, things have calmed down a bit. Homes are staying on the market for around 78 days before going pending, which gives buyers more breathing room.

Prediction: A Closer Look

Zillow's latest forecast gives us some interesting insights into the direction of Austin housing market. Here's a breakdown:

• Near Term (January 2025): A slight dip of -0.3% is expected.
• Next Quarter (March 2025): The forecast anticipates a further small decrease of -0.5%.
• End of Year (December 2025): A rebound is predicted, with a positive growth of 0.7%.

It is important to note that forecasts are based on current data and trends, and are not a guarantee of the future.

How Does Austin Stack Up Against Other Texas Cities?

Let's see how Austin's predicted growth compares to other major metropolitan areas in Texas:

City	Near Term Forecast (Jan 2025)	End of Year Forecast (Dec 2025)
Austin, TX	-0.3%	0.7%
Dallas, TX	-0.1%	1.7%
Houston, TX	0.1%	1.9%
San Antonio, TX	0.0%	1.1%
McAllen, TX	0.2%	4.9%
El Paso, TX	0.3%	4.5%
Killeen, TX	0.0%	2.8%
Corpus Christi, TX	0.1%	-0.3%
Brownsville, TX	0.5%	5.8%

As you can see, Austin's projected growth is more moderate compared to cities like Houston, Dallas, and the Rio Grande Valley (McAllen and Brownsville). This could be due to a number of factors, including Austin's already high home prices and a potential slowdown in the tech industry, which has been a major driver of the city's growth.

Will Austin Home Prices Crash?

Many people are wondering if we'll see a major crash in the Austin housing market. While I don't have a crystal ball, I believe a crash is unlikely. A significant crash would require a perfect storm of events, like massive job losses and a surge in foreclosures. While the market is cooling down, the underlying demand for housing in Austin is still strong, especially in the long term. Austin is still a desirable place to live. We have a thriving job market, great schools, and a vibrant culture.

What About 2026?

Predicting the Austin real estate market beyond 2025 is tricky, but here's my educated guess: I expect the market to continue to stabilize, with more moderate price increases. A lot will depend on interest rates, the overall economy, and how much new housing is built in the area. If interest rates start to come down, that could give the market another boost.

Final Thoughts

The Austin housing market is dynamic and ever-changing. It's important to stay informed and work with a trusted real estate professional who can help you navigate the market. Remember to do your research, consider your own personal circumstances, and make informed decisions.

Is the Austin Housing Market Still Overpriced?

If you're thinking about buying a house in Austin, you're likely wondering: is the market overpriced? The answer, like most things in real estate, isn't a simple yes or no. Let's dive into the data and see what it tells us.

Hot Market, High Prices

There's no doubt Austin's housing market has been on fire. A strong local economy, booming population, and influx of out-of-state buyers have sent home prices soaring. Studies show Austin homes are among the most overvalued in the nation, with buyers paying well above what the house might be worth based on traditional factors. Boise, Idaho, is the only city with a higher premium!

But Wait, There's More

Before you write off Austin completely, consider this: compared to other major cities, Austin can still be affordable. While the median price tag is high compared to its own history, it's lower than giants like San Francisco or Los Angeles. Austin's cost of living is also generally lower, making homeownership a more realistic goal for some buyers.

Looking ahead, experts are bullish on Austin's long-term prospects. The city's strong and diverse economy is less likely to take a tumble in a downturn, and the growing population suggests continued demand for housing. This could mean your investment appreciates over time.

So, is Austin overpriced? It depends on your perspective and priorities. If affordability is your main concern, the high prices might be a hurdle. But for those seeking a long-term investment in a vibrant city with a healthy economy, Austin could be a good fit.

The most important factor? Understanding your own financial situation and goals. Carefully evaluate your budget and long-term plans before deciding to buy in Austin, or any market for that matter. Don't be afraid to crunch the numbers and talk to a financial advisor to make sure your dream home doesn't turn into a financial nightmare.

How Does Austin's Housing Affordability Compare to Other Major Texas Cities?

Austin's housing affordability presents multiple challenges when compared to other major Texas cities such as Dallas or Houston. While Texas remains more affordable than many national housing markets, Austin has experienced a significant rise in costs, making it less accessible for many first-time buyers.

Factors contributing to this situation include high demand, low inventories, and the city’s reputation as a desirable place to live and work. With the average home value at $443,000 (Zillow), those looking to purchase homes may find affordability constraints more pronounced compared to the comparatively lower averages in cities like San Antonio or Fort Worth.

This ongoing affordability challenge prompts many to explore alternative housing options or consider nearby suburbs that offer more competitive prices.

Are There Signs of a Housing Bubble in Austin?

While discussions about a housing bubble are common, Austin's current market dynamics suggest a more nuanced reality. While home prices have surged drastically over recent years, the recent market corrections do not necessarily indicate a bubble that is about to burst. Instead, the recent declines signal a recalibration of values within the market.

Economic fundamentals such as strong job growth, diverse industries, and lasting demand for housing help support the market long-term. Nevertheless, potential buyers and investors should remain vigilant and conduct thorough market analysis to understand both local and national economic indicators that could influence Austin's real estate landscape.

Which Neighborhoods in Austin Are Seeing the Most Growth or Decline?

Certain neighborhoods in Austin are emerging as hot spots for growth, driven by ongoing development and lifestyle appeal. Areas like North Austin and East Austin have gained popularity among younger buyers and families due to their vibrant culture, accessibility, and amenities.

Conversely, some traditionally desirable neighborhoods are witnessing slower sales, primarily due to higher prices and mature markets that may not offer much in terms of new inventory. Identifying which neighborhoods are growing or declining entails paying attention to broader market trends, demographic shifts, and the availability of amenities that cater to emerging buyer preferences.

Is Austin Still Attracting Out-of-State Buyers?

Austin continues to attract a significant number of out-of-state buyers, drawn by its dynamic economy, quality of life, and cultural offerings. Although there have been fluctuations in migration trends, the city’s reputation as a tech hub and cultural hotspot maintains its allure for many relocating from states like California, New York, and Illinois.

This influx adds layers to the housing demand, as newcomers seek to take advantage of Austin's unique lifestyle and employment opportunities. As long as the city retains its appeal, it is likely to continue attracting out-of-state buyers, contributing to both local market vitality and growth challenges.

What Impact is Austin's Job Market Having on Housing Demand?

Austin's robust and diverse job market plays a significant role in driving housing demand. Tech industries, educational institutions, and healthcare services provide stable employment opportunities that continue to attract new residents. With companies expanding and relocating to the area, the demand for housing—both for purchase and rental—remains strong.

Additionally, job seekers and young professionals are increasingly drawn to the city's innovative landscape, further fueling residential demand. As long as Austin's economic climate remains favorable, the impact on housing demand is likely to persist, keeping the market dynamic and competitive.

Should You Invest in the Austin Real Estate Market?

Austin's rapidly expanding economic industry is driving more people into the city which is increasing the housing demand. A number of reasons have affected the present situation of the Austin housing market, one of which is the high migration of firms and persons relocating to the city from Texas and out-of-state, which has led to a robust and varied economy that attracts people seeking opportunity.

A surge of people moving in, combined with rapid population growth and low mortgage interest rates, has turned Austin and its surrounding area into a sellers' market. Austin’s engine of job and population growth is not projected to slow down anytime soon—the biggest drivers of residential real estate demand. Its economy has diversified and strengthened over the past two decades.

Companies like Google and Tesla are moving operations to Austin. The software giant Oracle has also relocated its headquarters here. As more companies move here, that means more people looking for homes, and the city is also attractive to outside investors. With a steady influx of job creation in the pipeline, the housing market will continue to post strong numbers. Big companies moving here will also play into what happens to the housing market.

If you're considering real estate investment, Austin, Texas, is a city that should be on your radar. Known for its vibrant culture, strong economy, and population growth, Austin offers numerous opportunities for real estate investors. Let's explore in detail why Austin is a promising destination for real estate investment.

Population Growth and Trends

Population Growth:

• Austin has been experiencing consistent and substantial population growth for many years. The city's population has been steadily increasing, making it one of the fastest-growing metropolitan areas in the United States.
• The city's appeal to newcomers is driven by factors like its vibrant tech scene, cultural attractions, and overall quality of life.

Trends:

• The population growth trend in Austin is expected to continue, with projections indicating a significant increase in residents over the coming years.
• As the city's population expands, the demand for housing, both rental and owned, is likely to rise, creating opportunities for real estate investors.

Economy and Jobs

Economic Strength:

• Austin's economy is robust and diverse, with a thriving technology sector, a burgeoning startup scene, and a strong presence of major corporations.
• The city consistently ranks high in terms of job creation and economic growth, making it an attractive destination for professionals seeking employment opportunities.

Job Market:

• The city's job market is diverse and dynamic, with a focus on technology, healthcare, education, and entertainment.
• Employment opportunities continue to draw individuals to Austin, contributing to the population growth and housing demand.

Livability and Other Factors

Livability:

• Austin consistently receives high marks for its quality of life. The city offers a vibrant cultural scene, excellent healthcare facilities, and access to outdoor activities.
• It's known for its music and arts culture, making it a desirable place to live for professionals and creatives.

Education:

• Austin is home to top-tier educational institutions, including the University of Texas at Austin. This draws students, academics, and their families to the city, further boosting the demand for housing.

Infrastructure:

• The city has invested in infrastructure and transportation improvements to accommodate its growing population, making it more accessible and commuter-friendly.

Austin Rental Property Market Size and Growth

Rental Market:

• Austin's rental property market is substantial and continues to grow. The city offers a wide range of rental properties, from apartments to single-family homes, catering to a diverse tenant population.
• The city's dynamic job market attracts young professionals, making it an ideal location for rental property investment.

Growth Potential:

• The city's population growth and job market strength contribute to the growth potential of the rental property market. As more people move to Austin, the demand for rental units is expected to rise.
• Investors can explore various rental strategies, including long-term leases, short-term rentals, and vacation rentals, to diversify their real estate portfolio.

Other Factors Related to Real Estate Investing

Investor-Friendly Environment:

• Austin's business-friendly environment extends to real estate investment. The city offers attractive incentives and a favorable legal framework for real estate investors.
• Real estate investors benefit from a strong property rights regime and a well-regulated market.

Tax Benefits:

• Texas does not have a state income tax, which can be advantageous for investors looking to maximize their returns.
• Investors should explore the tax implications of specific investment strategies, including property taxes and capital gains.

Market Resilience:

• Austin's real estate market has shown resilience during economic downturns, and it is considered one of the more stable markets in the country.
• Investors appreciate the market's ability to weather economic fluctuations and maintain its growth trajectory.

Diversification:

• Investors can diversify their portfolios by exploring various types of real estate, from residential properties to commercial and mixed-use developments, taking advantage of Austin's growing and diverse market.

As a real estate investor, Austin's population growth, strong economy, livability, rental property market size, and other investor-friendly factors make it a compelling choice. However, it's essential to conduct thorough market research, consult with local real estate experts, and tailor your investment strategy to your specific goals and risk tolerance. Austin's real estate market offers exciting opportunities, but informed decision-making is key to success.