Austin Leads the Nation in Price Corrections
The Freddie Mac House Price Index released this morning reinforces a trend we’ve been watching for two years—Austin is the hardest-hit major market in the country. Since peaking in May 2022, home prices here have fallen by nearly 15%. Year-over-year, prices are down another 5.4%, and month-over-month we’re seeing a 2.8% drop. While many U.S. cities, especially in the Midwest and Northeast, continue to post strong year-over-year price gains, markets across the South are headed in the opposite direction. Texas in particular, with Austin leading the way, is seeing declining prices driven by inventory surpluses and affordability constraints.
Active Listings at Record High Across the MLS
As of this morning, active residential listings across the entire Austin-area MLS sit at 18,146—a record high for our market. Compared to this time last year, that’s a 19.4% increase. What’s even more concerning is that this surpasses the previous record set just three days ago, confirming that inventory continues to build. Buyers now have significantly more options, but sellers face stiff competition. The surge in listings is driven by new construction, investor properties hitting the market, and traditional resales struggling to attract qualified buyers.
New Listing to Pending Ratio Hits Concerning Levels in the Six-County Area
One of the clearest indicators of market imbalance is the New Listing to Pending Ratio, which tracks the number of new listings compared to homes going under contract in the six-county Austin area. We are closing out June with a ratio of 0.48, meaning nearly twice as many homes are coming on the market as going under contract. This is one of the weakest absorption rates we’ve seen in over a decade. For context, a healthy market typically sees this ratio closer to 0.75–0.85. Ratios below 0.6 reflect a market flooded with inventory and weak buyer demand.
Activity Index and Months of Inventory Confirm Buyer Weakness
The Activity Index, which measures buyer engagement based on showings, offers, and pending contracts, has dropped to 19.7%, one of the lowest levels seen in recent years. This aligns with the declining pending sales and growing inventory levels. Months of Inventory, another critical measure, has climbed to 6.51, reflecting the amount of time it would take to sell all current listings at the current pace of sales. Anything above six months signals a buyer’s market—and we are now firmly in that territory.
Price Reductions and Withdrawals on the Rise
The market data also shows that 95% of price adjustments this past week were reductions. Many sellers are responding to the lack of activity by lowering prices, but not all are willing to make the necessary adjustments. As a result, withdrawn and expired listings are climbing, with many sellers opting to pull their homes off the market entirely rather than continue chasing buyers.
The Road Ahead
It’s important to recognize that while Austin is correcting faster than other markets, this is not entirely unexpected. The rapid price escalation during the pandemic years, combined with a flood of new construction and investor-driven demand, set the stage for this correction. For buyers, this presents real opportunity. There is more inventory, more negotiating power, and less competition. For sellers, realistic pricing, property condition, and strategic marketing are critical. The days of simply listing a property and expecting multiple offers are gone—for now.
Final Thoughts
Data is the key to navigating this market. Whether you’re a buyer looking for value or a seller adjusting to new realities, understanding these trends puts you in the best position to succeed. We’ll continue tracking these numbers daily, so stay tuned for the latest updates as this market evolves.
