Shonda Novak of Austin American-Statesmant writes,  "last week, I attended the Austin Board of Realtors' second annual Central Texas Housing Summit. It was loaded with facts, figures, insights and prognostications about the Austin-area housing market. One panel featured the board's housing economist, Clare Losey; Mark Sprague, a longtime Central Texas housing market analyst with Independence Title; and Selma Hepp, CoreLogic's chief economist who gave a national economic update.

Below are a few takeaways with Losey's outlook for the Austin metro's housing market over the next several months. Losey made the comments in a weekly audio interview called "Driving It Home" that features Losey and the board's CEO, Emily Chenevert.

  • Inflation will continue to ease — it's already down considerably from last year's highs in the 9% to 10% range, she said — and that will take pressure off of the Federal Reserve to continue to raise the benchmark federal-funds rate, thereby relieving some pressure on mortgage rates.
  • Losey predicts mortgage rates will be closer to the low- to mid-6% range by the end of the year.
  • The Austin-area market is now a year into the current cycle where its market has been correcting. Median home-sales prices peaked around April and May of 2023, then began easing in June 2023.
  • Losey says there may be "some flatlining" in home prices in coming months, but she doesn't think "we're going to see that very strong year-over-year home-price moderation that we have been seeing over the past several months, because we are now in a more analogous apples-to-apples comparison within the market."
  • Losey said it's important to remember that home prices "are still very much elevated" relative to pre-pandemic levels. In June, the median sales price in the Austin region ($483,000) surpassed that of June 2019 by 50%. That means "affordability constraints on home prices are still very much at play," she said. And coupled with higher interest rates, "that's what has been driving that moderation in sales activity and prices themselves."

In June, home sales in the Austin region decreased 8.5% from the prior June, and the $483,000 median sold price was down 9.6% from June 2022, the Austin Board of Realtors said in its latest report.

  • The Austin economy remains "very well poised to experience fairly robust growth," she said. The region has a strong labor market, with year-over-year job growth measuring 4.4% in June, one of the highest numbers across the state, and population growth is expected to continue driving demand for housing. "Overall we are weathering the broader macroeconomc turbulence well," Losey said."

Source: Austin American-Statesman

Written by: Shonda Novak

Published: August 1, 2023

Posted by Grossman & Jones Group on


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