Austin’s April 2025 Housing Update
Tariffs
Construction costs (materials, labor, etc.) are rising so eventually this will lead to a rise in new home values and higher renovation costs. This may not be immediate but be prepared for the near-term possibility. Contractors are reporting a reduction in the labor force due to stricter immigration rules. A reduction in laborers will affect construction timelines and costs.
Interest Rates
Interest rates remain volatile, moving recently anywhere between 6.5% to 7.14%. This means serious buyers should be prepared to lock in rates when your lender suggests. If you are in the market to buy, keep an eye on daily mortgage rates. There is anticipation within the financial industry that rates may be adjusted lower as early as July. When rates are lowered, anticipate more active buyers to enter the market. This will be more buyer competition, possibly higher home values. As of May 12, 2025, the average 30-year fixed mortgage rate stands at 6.962%, indicating a slight decrease from the peak observed in April.
Key Real Estate Trends
- Home values are remaining stable, neither increasing nor decreasing dramatically.
- There is fear among some of the possibility of a recession, however, historically, home prices have risen during a recession.
- Homes are spending more time on the market, averaging 50 days, which is an increase from the previous year. This suggests a cooling in the market and gives buyers more leverage
- New listings have increased 7.51% year over year, and 26% more listings versus pre-pandemic times. This is good news for buyers and has led to a healthier marketplace.
- 12,265 Active Listings and 2,525 Sold listings for home resales up to 500,000 (There are 54% more Active Listings now than pre-pandemic times.
- A healthy or balanced real estate market typically has around 5 to 6 months of inventory. Inventory is currently around 6.38 months, indicating that the market is tipping toward a buyer’s market, especially compared to the red-hot conditions of 2021–2022.
Buyers:
You have more inventory to choose from, and after about 30 days of a property being on the market, you typically have a bit of negotiating power. Correctly priced homes can still receive multiple offers so don’t assume you can immediately offer less on day one. Be cautious with your strategy. Don’t buy if you plan to sell within 3 years because home values are remaining flat, neither increasing nor decreasing dramatically. Stay in contact with your lender and be prepared to lock in a lower rate when it happens, watch rates closely as they have been volatile. The economy is in a tricky zone, inflation rates, employment data, and GDP growth continue to impact mortgage rate movements. The next anticipated rate decrease is expected possibly in July. Only consider refinancing after a rate decrease of 1%. Recently rates have moved between 6.5% and 7.14%. Be prepared to lock in rates in the 6’s.
Sellers:
More Active listings equal more competition. The key to a smoother sale is accurately pricing your home. 50 days on the market has been the average days to sell. Be hopeful for lower mortgage rates, as the lower rates will entice new buyers into the market. After 30 days of being on the market, buyers will have a bit more negotiating power. Be prepared to make concessions to sweeten up the deal for a buyer, especially if your home is sitting longer that you want. Be mindful that you have more competition, so make sure your home is the best it can be to entice buyers.