Finally, we've got some promising news to share when it comes to buying a new home in Texas! The Austin housing market is experiencing a shift that's making it more similar to the Dallas-Fort Worth area, and it's creating opportunities for those looking to buy or upgrade their homes.
Here's the scoop: In the third quarter, the median home price in Austin dropped by 7.9 percent year-over-year, now standing at $456,000. Comparatively, Dallas-Fort Worth's median price saw a smaller decline of 1.2 percent, with homes priced at around $400,000.
This change is narrowing the gap between these two rapidly growing regions. Just a year ago, the difference in median sale prices between Austin and Dallas-Fort Worth was a significant $86,500. Two years ago, it was even wider at $110,100.
While Austin is making housing more affordable, the Dallas-Fort Worth area also faces affordability challenges, with only 21 percent of homes priced under $300,000. Rising mortgage interest rates have contributed to the housing market's slowdown, with rates recently reaching the highest levels since 2000.
These higher rates have caused some potential sellers to hold onto their homes as they enjoy the benefits of their lower mortgage rates rather than entering a market with potentially higher payments.
Despite these challenges, Dallas-Fort Worth led Texas with over 24,000 home sales in the last quarter, even though it marked a 9.3 percent year-over-year decline.
In other Texas cities, Houston's median home price fell to $336,125, and San Antonio's dropped to $319,000. Statewide, the median home sale price decreased from $345,000 in the third quarter of 2022 to $340,000.
Homes in Texas are spending an average of 48 days on the market, which is slightly longer than the previous year. The state's housing inventory has also increased, now at 3.7 months, while Dallas-Fort Worth's inventory rose to 2.9 months. A well-balanced market typically has around six months of inventory. So we are getting closer!
Of course, housing affordability remains a concern in Texas, especially in cities like DFW and Austin, where it's approaching levels seen in larger cities like Chicago and New York. While home prices have come down this year, they surged at an unprecedented rate during the early years of the pandemic. To reach more affordable levels that align with people's incomes, further adjustments in home prices may be needed.
But if you're considering purchasing a home in Austin, reach out today to learn what your options are for securing a great mortgage rate.
