Austin Market Reports, March 2024

by | May 9, 2024 | Uncategorized

Hello Spring! My favorite time of year!

Here is a look back at our ATX real estate market for March 2024, and a peak at what we believe is on the horizon for this year!

Last month, we were certainly seeing the market pick up a bit, but this month, although still somewhat steady, the increase in rates has pushed mortgage application activity down a bit.

This is how March 2024 market activity compared with March 2023

Median sales price = $450K (same as March 2023)Sales price vs Original List price = 94.8% (up 4.5%)Months of Inventory = 3.8 months (up .7 months)Average Days on the Market = 80 daysActive Listings = 9478 (up 7.6%)New Listings = 4714 (up 10.2%)Pending Sales = 3166 (up 9.4%)Closed Sales = 2563 (down 1%)

Key Points

Elevated mortgage rates continue to keep home sales and prices at a relatively flat, steady state (Pricing and Closed sales are similar to March 2023; rates hovering in the high 6’s). Good news for buyers: An average 80 days to sell can provide buyers with more negotiating power, and time to research. New and active listings are up significantly YOY, providing a big surge in options.Closed sales are looking very similar to this time last year.

Good news for First-Time Home Buyers & Luxury Sellers

There’s a noticeable division in market activity, with increased activity seen in both the lowest-priced homes (under $300,000) and the highest-priced homes ($1M+).

Homes in the mid-price range ($400,000 to $750,000) have experienced a significant pullback in closed sales.

With that said, the market presents more opportunities for first-time buyers seeking affordable options, with significant (huge) increase in new listings (and sales) for homes under $300,000, and also for homes $300K-$399K! This trend is particularly evident in areas like Buda, Hutto, Kyle, Manor, and Taylor, where sales are increasing by double digits year over year.

It’s been a strong market for first-timers, with so much inventory! Builders are addressing affordability with lower priced options. Meanwhile, luxury buyers are driving sales in higher-priced segments ($1M+), mostly all within the city of Austin (not surprisingly). Mid-income buyers are a little less active.

Looking ahead, the latest inflation numbers are expected to keep mortgage rates hovering in the 6-7’s, with a chance that the Fed will lower interest rates sometime this fall. So the likelihood of the market shifting considerably is low – which is somewhat positive. A more stable market than years past provides certain and secure environment for both buyers and sellers!!

Mortgage Rate Predictions

Mortgage Market/Rates: Inflation Overshoots

Higher than expected inflation data was negative for mortgage markets this week.   

The Consumer Price Index (CPI) is one of the most widely followed inflation indicators. In March, Core CPI rose 0.4% from February, above the consensus forecast, and stands 3.8% higher than a year ago.

While the numbers are not devastating, we have now had 3 consecutive months of inflation data that is over forecast – 2.0% is the stated target level of the Fed.   Shelter/housing costs, restaurant food purchases, medical care and auto insurance showed high increases.

Expectations for a reduction in the US federal funds rate are pushed out to July or September timeframe, depending on the future data.

Let’s see what happens in May, June, July, September!

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