Navigating Austin’s housing market requires staying informed about the latest trends and market conditions. Whether you’re buying or selling, teaming up with experienced agents and understanding the data helps you make smart decisions for your future.
After a slower-than-normal 2023 and a relatively quiet December, the market is gaining momentum as we enter 2024. Mortgage applications are on the rise, multiple offers are becoming more common, and there’s a noticeable decrease in withdrawn listings. Home prices experienced a slight drop of 1% to $433K, and housing inventory saw a modest increase to 3.0 months. The market’s confidence is reinforced by a notable surge in new and pending listings, setting a positive tone for the year ahead.
Let’s explore key points from the December 2023 Austin real estate market:
- Home prices increase monthly – Median home prices rose by 4% from November to December last year, though they remain 1% lower compared to the previous year. This uptick hints at a potential positive trend or market stabilization.
- Withdrawn listings decrease monthly – The number of listings removed from the market declined by 25% from November to December last year, suggesting a potential strengthening or stabilizing trend in market activity.
- Increased homes for sale – The number of homes for sale increased by 4% compared to the previous year, giving buyers a broader selection.
- Extended time on market – Homes now stay on the market for an average of 84 days, up by 11 days from a year ago.
- Increase in new listings – New listings increased by 8% compared to last year, continuing to instill confidence in the real estate market for 2024.
- Boost in buyer demand – Buyer demand increased by 13% compared to last year, meaning that higher mortgage rates are not discouraging buyers from purchasing.
- Slight decrease in home sales – Home sales decreased by 8% compared to last year, but increased by 11% from November.
- Housing supply and inventory – Housing supply currently sits at 3 months, up 0.4 months from this time last year.
Current market snapshot – Currently, there are over 7,000 homes for sale, with more than 3,000 homes seeing a price reduction in the last month.
Source: Austin Board of REALTORS®, Austin-Round Rock Metropolitan Statistical Area
Reflecting on 2023: A Year of Challenges and Milestones
Nationally, the year concluded with 4.09 million existing home sales, marking the lowest level since 1995, as reported by NAR. The 30-year fixed-rate mortgage reached a 23-year high in early November, and a persistent shortage of inventory remained a challenge throughout the year for homebuyers.
Mortgage Market and Housing Outlook for 2024
In 2024, Fannie Mae predicts a positive shift in the mortgage market, expecting rates to drop below 6%, reviving existing home sales. Amid a slowly growing economy, the housing market is anticipated to find balance, benefiting from a decline in inflation and potential rate cuts. Following a market low in the second half of 2023, signs of improvement are evident. Fannie Mae forecasts a stable rise in existing home sales, limited home price growth, and an increase in mortgage loan origination volume.
“This positive outlook creates opportunities for both buyers and sellers, promising lower rates, enhanced affordability, and a more stable housing market in 2024,” said John Coake, Head of Sales at Realty Austin Compass.
Austin Job Growth: Impact on Housing Market
Austin, ranking 14th among the top 50 metros, according to the latest Centex job growth and unemployment report, witnessed substantial job growth, adding 32,800 jobs, marking a robust 2.5% increase in 2023. The construction and natural resources sectors led with an impressive 10.5% growth, while education and healthcare followed at 5.9%. This flourishing job market has a positive impact on the housing sector, drawing potential homebuyers to the city. Despite this, the seasonally adjusted unemployment rate in Austin saw a slight increase from 3.5% in November to 3.6% in December, indicating a nuanced landscape.
“For potential home sellers, comprehending job market dynamics is crucial as they influence buyer demand and overall market conditions,” explained Tom Thornton, Agent Success Manager at Realty Austin Compass.
Homebuilders’ Growing Optimism
Austin’s housing market faces a dynamic start in 2024 as home builders express growing optimism for the second consecutive month, with the NAHB/Wells Fargo Housing Market Index rising seven points in January. This surge in confidence is attributed to mortgage rates staying below 7%, enticing buyers back into the market after a period of higher borrowing costs. However, despite the positive sentiment, challenges such as reported price cuts (31% of builders reducing prices by an average of 6%) and impending supply-side issues are on the horizon.
“Potential home buyers and sellers in Austin navigate a market characterized by optimism, affordability concerns, and challenges in the supply chain, shaping their decisions in the coming year,” advises Jennifer Korba, Agent Success Manager, Realty Austin Compass. “Partner with a trusted local expert to navigate the housing market and make informed decisions for a successful real estate journey.”
Mortgage Applications Increase, Influencing Homebuyer Demand
Mortgage applications went up by 3.7% for the week ending January 19, 2024, according to the Mortgage Bankers Association’s Weekly Survey.
“Even though the interest rates on mortgages slightly increased, there was still a rise in applications from people wanting to buy homes. More loan applications could mean more people are interested in buying homes, impacting the overall demand in the housing market,” said Amanda Dudley, Agent Success Manager at Realty Austin Compass.
As you embark on your real estate journey, Realty Austin Compass is here to guide you through the ever-changing market. Our team of experienced agents is committed to providing personalized insights and expert guidance, empowering you to make informed decisions for your future. Connect with us at 512-241-1300 or realtor@realtyaustin.com to ensure a successful and seamless real estate experience.
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