Is the Austin Housing Market Crashing?

The question that’s been on many people's minds: Is the Austin housing market finally crashing or has it already crashed? Today, I’m diving into the most recent numbers for May and breaking down what’s really happening in the Austin housing market. With all the talk about rising inventory, dropping prices, and increasing buyer activity, let’s see what the data really says and whether now is the time to buy or sell.

Austin Rental Market: What’s Going On?

First off, let’s briefly touch on the rental market, which has been a bit of a hot topic. Year-over-year rents in Austin are actually down by about half a percent, which might seem like good news for renters, but the supply is still limited with only about 2.3 months of inventory available. So, the rental market isn’t crashing, but it’s not exactly growing either. There are also fewer investors in the market right now, which could mean less pressure on rents.

Are you feeling like the rental market is tight? Let me know in the comments.

Austin Housing Prices: Are They Dropping?

Now, onto the big question — Austin housing prices. The median price for homes in the Austin area is currently at $449,000, which is slightly down year-over-year. But here's the interesting part — 59% of the closings in May were under $500,000, which is actually a better deal for buyers right now compared to previous years.

Despite all the talk about interest rates (currently around 6.88%), buyers are still getting back into the market, and we're seeing an increase in applications for loans — up 20% year-over-year! So, while rates may not be ideal, buyers are still active.

Pending sales in Austin are up 16% year-over-year, showing that there’s still significant buyer interest in the market. Active listings are also up 17% year-over-year, which means there are more options for buyers to choose from. This increased inventory is leading to price reductions, with homes selling at an average of 5% below their list price.

The Best Time to Buy in 2025?

Even with the higher rates, it may still be a good time to buy, especially in the second half of 2025. With more inventory available and prices trending downward, those buyers who wait may be in an even better position towards the end of this year, especially if mortgage rates come down.

Local Market Trends: Georgetown, Round Rock, Dripping Springs, and More

Looking closer at some of the key areas:

• Georgetown: Prices up 2.5% year-over-year, median price at $470,000.

• Round Rock: Down 4.4% at $430,000.

• Leander: Down 3.1%.

• Kyle: Down 7.2% at $330,000.

• Lakeway: Up 28% at $880,000.

Dripping Springs is a bit of a mixed bag: median prices down 13% year-over-year, but you can still find great deals in the $500,000 range.

What Does This Mean for Sellers and Buyers?

For sellers, the market is competitive. While there’s more inventory, you still need to price right or risk your home sitting on the market for longer than expected. For buyers, there are more options and better deals available, but you have to keep an eye on interest rates and be prepared to negotiate.

Conclusion: Is the Market Crashing?

In short, no, the Austin housing market isn't crashing — it's just going through a natural correction. Prices are down slightly, but there’s still a healthy level of demand. As we head into the second half of 2025, prices are likely to continue dropping, especially as inventory increases.

Whether you're buying or selling, it’s important to stay informed and work with someone who understands these shifts. Are you buying in Austin now, or waiting until later? Let me know in the comments below!

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