Austin Area Housing Market Steadies in First Half of 2025: Chuck Farr’s July 2025 Newsletter
Welcome back to the dog days of Summer, homeowners, tenants, prospective buyers, and real-estate investors!
Market Backchannel: As we enter late July, the Austin area real-estate market shows continued stability in pricing--and has been so for the last two years. The latest April Central Texas data from my local realty network shows continued resilience as we continue into mid-Summer (March through May are considered peak selling months). Active listings are up for most of this year (up 16% to 18% year-over-year depending on data source)--and I have seen the evidence myself in more yard signs in both Austin and Taylor. Months of sales inventory remain around 5.5, indicating a balanced market leaning more in buyers’ favor (especially with the added listings). Average days on market remain around 72 days. In macro employment news, for the first time in over two years, job postings are up, increasing more than 4% from last June.
At today’s writing, mortgage interest rates are up compared to 2021 and continue to hover in the mid to upper 6% range. According to Google Gemini AI, “The median expectation of Federal Open Market Committee (FOMC) members, as reflected in the dot plot from the June 2025 meeting, suggests two quarter-point rate cuts before the end of the year. The target federal funds rate is expected to fall to 3.9% by the end of 2025, equivalent to a target range of 3.75% to 4%.” Here is some guidance regarding federal funds rate versus mortgage interest rates: “while the federal funds rate can indirectly influence mortgage rates, it's more helpful to focus on the 10-year Treasury yield and the spread between it and mortgage rates as a guideline. The historical average spread [between 10-year Treasuries and home loans] has been between 1.5 and 2 percentage points, but this can fluctuate based on market conditions.”
Also: “Some economists and analysts share this caution, suggesting that cuts may not happen until later in the year, or potentially not at all in 2025, especially if inflation remains stubbornly above the Fed's 2% target.” The economy shows signs of strengthening, but the Fed takes its signals from inflation data. If you are a buyer, Google Gemini AI says this about EOY mortgage interest rates using aggregate data: “Most forecasts suggest that 30-year fixed mortgage rates will remain above 6% throughout 2025. This is largely attributed to ongoing economic growth, inflation concerns, and government debt worries keeping rates higher.” Nobody can predict the future, but the bottom line is that you should not expect the extremely low home loans of recent years to return soon—maybe not for years (or decades).
In the News: According to the June and Mid-Year 2025 Central Texas Housing Report released by Unlock MLS, “closed sales in the Austin-Round Rock-San Marcos MSA rose 2.8% to 2,823 sales compared to June 2024, while the median sales price remained flat at $449,900. Year-to-date, closed sales dipped 5.3% to 14,643 sales, a decline that was anticipated following early-year economic uncertainty. As inventory rises and market activity gradually levels out, the Central Texas housing market continues to demonstrate signs of stability heading into the second half of the year.
“Vaike O’Grady, research advisor at Unlock MLS, said the data reflects a market that’s steadily finding its footing.
“‘The Central Texas housing market is continuing a gradual adjustment following a subdued start to the year, with current indicators signaling movement toward a more balanced environment. Although year-to-date sales remain below 2024 levels, the rate of decline has moderated, and rising inventory is expanding buyer choice.”
“She added, ‘At the same time, the median sales price has held steady, underscoring ongoing demand and reinforcing long-term confidence in the Austin market. Mortgage rates are expected to stay relatively stable, meaning sellers will need to remain flexible on pricing to maintain progress, particularly as affordability remains a significant hurdle for many first-time buyers. With close to 15,000 homes sold year to date, the market is potentially positioned to close the gap with last year’s pace if these trends continue.’”
“Austin-Round Rock-San Marcos MSA [Entire Metro Area]
“June 2025 Sales [Year-Over-Year]
2,823 – Residential homes sold, 2.8% more than June 2024.
$449,900 – Median price for residential homes, flat compared to June 2024.
4,562 – New home listings on the market, 4.8% more than June 2024.
15,360 – Active home listings on the market, 18.2% more than June 2024.
2,706 – Pending sales, 3.5% more than June 2024.
5.5 – Months of inventory, 0.7 months more than June 2024.
$1,655,124,625 – Total dollar volume of homes sold, 4.5% more than June 2024.
93.9% – Average close to list price, compared to 94.8% in June 2024.
“Year to Date Sales
14,643 – Residential homes sold, 5.3% less than the first half of 2024.
$439,970 – Median price for residential homes, 2.2% less than the first half of 2024.
28,560 – New home listings on the market, 8.4% more than the first half of 2024.
76,148 – Active home listings on the market, 19.9% more than the first half of 2024.
15,881 – Pending sales, 3.6% less than the first half of 2024.
$8,457,166,687 – Total dollar volume of homes sold, 5.2% less than the first half of 2024.
“Year to Date Leases
13,382 – Closed leases, 2.6% more than the first half of 2024.
$2,250 – Median price for rent, 2.0% less than the first half of 2024.
17,864 – New lease listings on the market, 3.0% more than the first half of 2024.
26,527 – Active lease listings on the market, 3.8% more than the first half of 2024.
15,529 – Pending leases, 5.4% more than the first half of 2024.
$27,267,617 – Total dollar volume of leases, 3.6% less than the first half of 2024.”
For folks in the Austin MSA area, if you had bought a house in 2018 at the median price of $305K, its value would have increased to $502K by the May 2022 peak. Median price for the MSA is now still nearly $450K, so you would have still done well investing in Central Texas real estate. Check the latest Central Texas Housing Report for more details and data for the city of Austin (Travis) and surrounding counties. You will see a wide range across the area, so check details in the report about where you live.
Summer Home Maintenance Tips: Summertime has its own home maintenance checklist in Central Texas, especially for existing property owners. Here are a few items to consider during July (a repeat of our June issue):
· Set your mower on the highest setting so you do not cut the grass too short and expose it to drought and weeds.
· Make sure your foliage gets plenty of water during hot summer days. Water early in the day, but not necessarily every day. Plants prefer a good soaking a few times a week rather than a light, daily drizzle.
· Reverse the setting on your ceiling fans to counterclockwise (search YouTube for how to do that). This pushes the air down, creating a nice breeze. Shut off fans when you leave the house to save electricity.
· Whether you have central air-conditioning or window units, you should clean or replace your filters at least once every other month (or more often if they are visibly dirty).
· Check the weather stripping around doors and windows to keep the cool air in. Cover windows that receive morning or afternoon sun with drapes.
· Increase your insulation in the attic to R-30 or more. Each month buy a little insulation until the job is done. Alternatively, consider adding in the new foam-style insulation inside your walls and in the attic with the help of a professional.
When considering your real-estate needs and situation in the context of macro-level data, remember that your potential sale or purchase will always be hyperlocal. Let us know if we can help. Issues of this and previous newsletters are located on the Blog tab of my website at www.chuckfarr.com. Please DM or email me if you want your email added to my newsletter list.
