If you’ve been watching the housing market in Central Texas, you've likely noticed a shift—not a complete turnaround, but meaningful movement. Here's what’s happening, and why it matters.
Mortgage Rates Are Falling—At Last
The 30-year fixed mortgage rate is now around 6.49%, its lowest level since last October. That drop—about 15 basis points in one week—sparked a 9.2% surge in overall mortgage applications. Refinancing activity jumped even more sharply, up 12% week-over-week and 34% year-over-year, according to Reuters.
This downward slide in rates is largely tied to a softening job market, which has pushed down 10-year Treasury yields and raised expectations of a Federal Reserve rate cut. Business Insider reinforces this bullish trend: both 15-year fixed and 5/1 ARM rates are now hovering around 5.7%, the lowest in about a year, fueling a spike in demand.
What It Means for Buyers and Sellers in Central Texas
Austin’s Market is Still Cooling
On the pricing front, Austin homes are down significantly from their 2022 peaks—average prices have dropped ~13.5%, while medians are off ~18.5% according to data from The Austin Board of Realtors.
Meanwhile, according to the Austin American Statesman, year-to-date figures show a 2.4% decline in median price (to around $439,000) and 6.4% fewer homes sold in the Austin metro. Active listings surged nearly 20%, pushing inventory up to 5.5 months—just shy of a traditional "buyer’s market threshold". Despite the commonly held belief that 6 months of inventory indicates a buyers market, for all intents and purposes, central Texas is, and has been a buyers market for several months now. The average listing in the metro is taking approximately two months to sell, which almost certainly means that they will have to reduce their price in order to get an offer, and still average a contract price approximately 7% below the current asking price at the time of the contract.
In short: buyers hold more leverage than they have in years—but market efficiency is showing signs of life. Pricing still matters, and the balance will continue to shift slowly.
Broader Context & Forecasts
Realtor.com notes that nationally, inventory is rising: active listings grew 20.9% year-over-year in August, reaching over 1 million homes. Yet, pending sales fell and homes now sit on the market longer—about 60 days, slightly above pre-pandemic norms.
Buyers are more optimistic: sentiment ticked up in August, with 28% of respondents saying now is a good time to buy, compared to 23% in July. And 33% anticipate rates falling, up from 28% last month—lending credence to that narrative.
What Comes Next for Central Texas?
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Buyer Leverage Remains—but Won’t Always
Mortgage rates are trending downward, and inventory is rising—making right-now a great window for buyers. But with momentum in buyer demand, the advantage may shrink in the coming months. -
Watch the Fed—but Don’t Expect a Return to the “Low Rates Era”
If the Fed cuts rates, we could see continued declines in mortgage costs. That said, most forecasts caution that rates are unlikely to dip below 6% this year. -
Pricing Flexibility Is Key for Sellers
Buyers are discerning. In a market where inventory outpaces demand, homes priced and marketed sharply will stand out. Likewise, homes that are overpriced, often priced well above what they could realistically appraise for, tend to sit and either fail to sell, or eventually sell below fair market value because of the negative perception that comes along with a high number of days on market. -
Opportunity for Buyers, Especially First-Timers
With affordability under pressure, buyers may still face challenges—but lower rates and elevated inventory offer a better entry point than in the last few years.
Final Thoughts
Mortgage rates may not be plunging to historic lows, and if all goes well, they never will again—but their decline is enough to reignite activity. In Central Texas, and especially Austin, the housing market is showing signs of steadying. Inventory is up, pricing is softer, and demand is picking up.
If you're thinking about buying, this is a clearer window than we’ve seen since 2022. And if you're selling, staying realistic and moving quickly will almost certainly lead to stronger outcomes.
