It’s been a wild couple of months in the real estate world; here’s a quick market update for Austin, TX.
Interest Rates: 2022 mortgage rates spiked after a historic low period in interest rates throughout 2020 and 2021. Right now rates are hovering around 5.5%. The 30-year average for mortgage rates is around 7%, so buyers are still in a ‘good spot’ historically, though new loans are more expensive this year vs last year.
Time on Market: Inventory (number of homes available) is up and hovering around 3 months of inventory. Compared to 2021 where the majority of the year saw roughly 2 weeks of inventory, this is a plus for buyers (more homes to choose from) and a wake-up call for sellers (more effort needed to sell).
A balanced market is 6 months of inventory. Austin is still in a firm seller’s market, but it’s a much more ‘normal’ seller’s market than 2021, where almost any listing at any price would sell in one weekend. Today’s sellers should prepare to price appropriately and make smart repairs/improvements to their home prior to listing it for sale. The current average time on market is just short of one month.
Home Pricing: Home prices are still increasing throughout the Austin metro area. Some new home builders have reduced pricing on already built, ready to sell inventory homes however. If you’re a home buyer looking for a deal, new construction is the smart choice right now. If you’re shopping traditional resale homes, keep in mind that pricing has not slowed down month over month, so waiting is still likely to cost you more in the long run.
The Takeaway: Rising interest rates has affected buyer purchasing power over the last several months, and the jury is still out on whether mortgage rates will go down or continue to increase. Meanwhile, home prices continue rise, albeit at a much more reasonable pace than the past two years.
The best time to buy a home is when you need a home. Refinancing options are available should interest rates decline down the road, and our best advice given Austin’s still-appreciating market is to focus on the house, not the interest rate! Buyers considering new construction may benefit from a 6-month or 1-year rate lock. Reach out to us if you need a lender connection who offers this!
Home owners who purchased in 2020 or earlier likely have a large amount of equity in their homes. Contact us any time for a free, no-pressure price analysis. We’re still in a seller’s market and there are buyers who would love to see more inventory.
That’s a wrap on the August market update for Austin, TX! We’d love to be your resource for all things real estate, so please reach out any time!