As home prices continue to fall in the Austin area, its housing market is starting to look more like Dallas-Fort Worth’s.
The median home price in Austin dropped 7.9 percent year-over-year in the third quarter to $456,000. In comparison, DFW’s median price declined 1.2 percent to $400,000, the Dallas Morning News reported, citing a report from Texas Realtors.
This price shift is narrowing the gap between these two fast-growing metro areas. A year ago, the median sale prices in Austin and Dallas-Fort Worth were $86,500 apart, and the gap was even wider two years ago, when it was $110,100.
Just 21 percent of North Texas homes are priced under $300,000, indicating an increasing affordability challenge for buyers. The housing market slowdown can be attributed to rising mortgage interest rates, which have soared to the highest levels since 2000. The average 30-year fixed mortgage rate recently reached 8 percent, diminishing buying activity in both metros, as would-be sellers are staying put with their low mortgage rates instead of braving the market and risking a higher payment.
Despite these challenges, DFW led Texas with over 24,000 home sales last quarter. However, that figure marked a 9.3 percent year-over-year decline.
Elsewhere in Texas, Houston’s median home price fell 1.1 percent from a year ago to $336,125, and San Antonio’s dropped 1.6 percent to $319,000. Statewide, the median home sale price fell from $345,000 in the third quarter of 2022 to $340,000, the outlet reported.
Homes in Texas spent an average of 48 days on the market, which was 17 days longer than the previous year. The state’s inventory also increased from 2.7 to 3.7 months, while Dallas-Fort Worth’s inventory rose from 2.3 to 2.9 months. A balanced market should have about six months of inventory.
Housing affordability remains a concern in Texas, especially in metros like DFW and Austin, where unaffordability levels are approaching levels in cities like Chicago and New York. Even though home prices have fallen this year, they skyrocketed at an unprecedented rate in the initial years of the pandemic, and thus they’ll need to come down even more in order to reach affordability levels more aligned with people’s incomes.
—Quinn Donoghue
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