Austin Home Prices Hit BOTTOM!

Is the Austin Housing Market Finally Coming Back? The Top 5 Fastest Growing Areas in 2025

The Austin housing market has been through its ups and downs in the past year. As we move further into 2025, many homebuyers and investors are wondering: Is the Austin market finally on the rebound? And if so, which areas are seeing the biggest growth?

In this post, we’ll dive into the current market conditions, discuss potential interest rate drops, and highlight the top 5 areas in Austin that are seeing the fastest appreciation.

Market Update: The Road to Recovery

Despite the challenges brought on by rising mortgage rates, the Austin housing market is showing signs of life. While mortgage rates are still hovering around 6.8%, there’s hope on the horizon. Many analysts predict a rate drop by September 2025, with some forecasts suggesting rates could fall to below 6.5% by the end of the year. This would be a major relief for homebuyers, especially after the higher-than-usual rates of 2023 and 2024.

Mortgage application numbers have been steadily rising, up 13% compared to the same time last year. This uptick in applications signals that buyers are starting to return to the market, signaling more activity in the coming months.

But what about the current state of inventory and home prices?

Inventory Trends in Austin

Inventory has been increasing, which is good news for buyers. The total months of inventory has gone up slightly, giving buyers more choices. However, homes are still moving fairly quickly, with more than 60% of homes selling under $500,000 in the past month. Prices are flat compared to last year, with a slight increase in pending sales.

What's fascinating is that sales numbers are now catching up to the previous year, with a slight uptick in pending sales. With prices remaining stable, this is encouraging for both buyers and sellers, who can expect a more balanced market moving forward.

Top 5 Fastest Appreciating Areas Around Austin

If you’re looking to invest in a property that will see continued appreciation, there are five key areas around Austin that are showing strong growth.

1. Elgin (78621)
   Elgin is a rising star, with home prices in this area seeing a 57% increase from $339,000 last year to $532,000 in the past 12 months. A lot of this growth can be attributed to the Samsung semiconductor plant and other developments in nearby Taylor. However, it’s important to note that these prices may seem inflated, so prospective buyers should proceed with caution.

2. Round Rock
   Round Rock continues to be a solid choice for buyers looking for an affordable yet growing market. With the average list price at $485,000 and an average sale price of $469,000, Round Rock offers a competitive market for buyers, while still seeing a steady increase in home values.

3. Liberty Hill
   Liberty Hill’s appeal has been rising, with an average sale price of $669,000, up from the average list price of $634,000. As this area becomes more accessible due to the expansion of the highway, expect more buyers to be drawn to this peaceful, suburban setting.

4. Bastrop
   This area is gaining popularity due to its affordable options and strong community feel. The average sale price in Bastrop is $493,000, with a similar list price, indicating a fairly stable market with strong interest from buyers.

5. Georgetown
   Georgetown has long been a favorite, and it’s only getting better. The average list price of $558,000 is close to the average sale price of $611,000, indicating continued demand and consistent appreciation in this northern suburb.

What’s Next for Austin?

Looking ahead, if interest rates drop, we expect to see more buyers returning to the market, which could lead to even more price stability and potential growth. Buyers will likely see increased affordability as the market normalizes, especially in areas where inventory is rising.

However, sellers will need to price their homes correctly in order to remain competitive in a market where homes are sitting for longer than in previous years. As 5% of homes are still closing below their listing prices, it’s essential for sellers to adjust their expectations and be flexible with negotiations.

Should You Buy Now?

If you're considering buying a home in Austin, now could be the perfect time to lock in a deal before interest rates potentially drop later in the year. While we’re seeing a stable market in the city, there’s still the potential for further appreciation in the next few months.

In summary, Austin is not crashing, but instead entering a period of stability. With more inventory on the market and signs that mortgage rates will soon drop, 2025 could be an ideal time to purchase or invest in the area.

What do you think? Are you ready to take advantage of these market conditions, or do you plan to wait for even better deals? Let me know your thoughts in the comments below!

Looking to Buy or Sell in Austin?
If you’re ready to make a move or just want to explore your options, don’t hesitate to contact me. I’m here to guide you through every step of the process in the Austin real estate market. Let’s make 2025 the year you find the perfect home!