Austin Housing Market Update January 2025: Inventory, Pricing, and Trends : The Austin housing market is currently navigating a dynamic period marked by significant shifts in inventory, activity, and pricing. As of January 14, 2025, active residential listings in the Austin area stand at 11,124, reflecting an 8.56% decrease month-over-month and a 12.7% increase year-over-year. Despite this growth compared to last year, inventory levels have been on a steady decline from a peak of 15,503 active listings in July 2024, indicating tightening market conditions.
Pending listings have shown a slight contraction, with 3,349 properties under contract, marking a 3.5% year-over-year decrease. This dip in pending sales is directly tied to rising mortgage rates, which have steadily climbed to 6.93% as of January 9, 2025. Higher borrowing costs have led to decreased affordability, making it more challenging for buyers to enter the market. Additionally, the surge in homeowners insurance premiums has further strained affordability by driving up the total cost of ownership, particularly impacting monthly PITI (Principal, Interest, Taxes, and Insurance) payments. These combined pressures are causing buyers to pull back, leading to softened demand.
The Activity Index, a measure of market engagement, has also declined to 23.1%, representing an 11% drop compared to the previous year. This downturn highlights a slowdown in transactional activity, influenced by rising interest rates and affordability constraints. The Months of Inventory (MOI) has risen to 3.89, a 12.2% increase from last year, indicating a more balanced market leaning slightly towards buyers. This rise suggests that properties are staying on the market longer, offering buyers more options and negotiating power.
Analyzing property conditions, resale homes make up 57.9% of active listings, averaging a price of $730,233, down 6.8%. New construction accounts for 20.2% of listings, with an average price of $693,014, a 7.3% decline. Under-construction homes, comprising 12.6% of the market, average $551,569, reflecting a 6.5% price drop. These trends indicate broader pricing adjustments across different property conditions, possibly as sellers adapt to evolving market dynamics driven by affordability challenges.
Special listing conditions, including foreclosures and short sales, represent a small yet notable portion of the market. Real estate-owned (REO) properties account for 0.94% of active listings, averaging $636,531—a 7.4% decrease. Short sales, making up 0.33% of listings, average $420,082, reflecting an 8.7% drop. These segments highlight distressed property trends that could influence overall market pricing and buyer interest.
Geographically, market activity varies. Austin leads with 2,877 active listings, showing a 2.2% price increase, while suburban markets like Georgetown and Pflugerville have 890 and 273 listings, respectively. Georgetown has experienced a 6.2% price increase in pending sales, and Pflugerville leads with a 7% rise in activity. Notably, Kyle and Manor show robust pending sales growth of 7.3% and 6.5%, reflecting growing demand in these areas despite broader affordability challenges.
The market's occupancy status reveals that 65.7% of listings are vacant, offering immediate move-in opportunities, while 30.2% are owner-occupied, and 4% are tenant-occupied. This mix suggests a healthy supply of ready-to-sell properties, potentially catering to buyers seeking swift transactions.
In conclusion, the Austin housing market is exhibiting signs of moderation with rising inventory and softened buyer demand. Higher mortgage rates and increasing homeowners insurance premiums are applying upward pressure on monthly housing costs, leading to greater buyer hesitation. However, the year-over-year increase in active listings and the diversity in property conditions indicate evolving opportunities for both buyers and sellers. Understanding these detailed market trends is essential for navigating the current landscape effectively.
Visit our Active Residential Listings in the Austin-Area page under Insight and Statistics for the latest data and information on real estate inventory in the Austin-Area.
