AUSTIN (KXAN) — Median home prices in the Austin-Round Rock-San Marcos metropolitan statistical area (metro) continued to fall in August compared to a year prior, but are still out of reach for most prospective homebuyers, according to a new report from the Austin Board of Realtors (ABoR).
ABOR housing economist Clare Knapp said that active home listings are up 15.4%; however, closed sales are down 10.4% compared to August 2023.
“However, we still are seeing buyers largely being constrained by affordability from both higher mortgage rates and still elevated home prices,” Knapp said. “We’re looking at home prices that are relatively flat on a year-over-year basis. It’s not likely that buyer demand is really going to move until home prices come down more meaningfully.”
The median sales price in August was $439,990, down from $450,000 in July. Within the city of Austin, prices rose nearly 2% year-over-year to $585,000.
Improving mortgage rates helps buyers’ purchasing power, but prices are still inflated following the COVID-19 pandemic. Thawing rate lock and potential rate cuts by the Federal Reserves may help make the market more fluid.
“Mortgage rates will continue to decline over the next couple of months as the Federal Reserve induces its rate cuts,” Knapp said. “However, those declines aren’t likely to be sufficiently large so as to induce a meaningful uptick in buyer demand. We really do need to see declines in home prices to offset those affordability constraints for buyers somewhat.”
In order to be competitive, Knapp recommends that sellers work with a realtor to price their home listing. Homes with curb appeal and ones that don’t need renovations are most likely to sell at the current moment.
“Prices do need to come down somewhat to be more aligned with what buyers can reasonably afford. Buyers just don’t have the same amount of cash lying around that they did a couple of years ago,” she said.
Homes in the metro have an average listing time of 70 days, up from 63 days in July and 57 in May. The average “close to list price” rate was at 93.3% of sellers’ list prices. August was a tough month for the city of Austin itself — fewer homes sold, fewer pending sales, and a close-to-list price rate of 92.3%.