The Austin housing market is a bit stagnant right now, along with the air, heat, and even interest rates. It’s pretty easy to feel the effect of mortgage rates on the market. As soon as they start with a six, we get an uptick of homes suddenly going under contract. When the rates hit seven again, everything stops. Remember the schoolyard game red light, green light? It’s kind of like that. Here are some market insights and home buying tips to help you decide when to stop and when to go.
I’m not alone in my thinking that if rates weren’t what they are, the Austin housing market would feel like the wild west of the 2021/2022 market all over again. It’s easy to see over weekends, especially with open-house traffic. Rates generally get press coverage on Thursdays and that affects buyer motivation. When the rates start with a seven, there is often less weekend traffic.
The Austin housing market is sitting at a red light
While it’s fairly easy to measure the correlation between mortgage rates and housing activity; it isn’t so easy to pinpoint how significant the weather factoring in too. It has been a record-breaking summer for heat and not just in Texas. The average temperature in Austin alone has been over 100 degrees Fahrenheit for the past 30 days. Interest rates are national, as is the lack of housing inventory and high lumber costs. Austin real estate wasn’t the only wild market two years ago, though it was already a hot market when all of this started.
There isn’t a magic formula for when the housing market gets ‘better’. The supply is going to stay low. Too many homeowners have a current mortgage rate below four percent. They don’t have the moving bug for long. It turns out the cure for it is interest rates.
Looking at homes is the only fun part of the home-buying process. An entire summer of three-digit temperatures has sucked the fun out of it.
When the weather breaks it will be enjoyable to look at houses again. I don’t know how many pent-up homebuyers are sitting at that red light waiting. Fall may become the new Spring as temperatures cool and interest rates settle. If demand goes up prices will too because the supply just isn’t going to be there.
Is it a good time to buy a home in Austin? Much can be done while waiting for a green light.
If you want to buy a home, buy one. The Austin real estate inventory is better than it’s been in years. Much needs to be done first in the comfort of your air conditioning regardless. There is no reason to look at homes in person right now. You aren’t getting the rate du jour anyway if you haven’t done your homework. The only exception is if you want to buy a new build (it is prudent to go in a slightly different order due to incentives and timelines).
Here’s another fun fact: If you are equity rich as a seller and/or have a significant down payment as a buyer with a good credit score, the chances are you are not paying the rate you are hearing on the news anyway. The rate you get is based on data unique to your credit history, your timing, income, and the mortgage product you pick.
See my home buying tips below on what can be done first without leaving home. This way you will be ready when the light turns green.
Home buying tips to beat the heat
1. Stay Home. There is plenty to do first in the comfort of your own air conditioning.
2. Get pre-approved first with a lender if you are not a cash buyer. If you don’t have a local lender, ask me.
3. Ask for a custom home search based on your criteria and what you can afford.
4. Scroll through your search. Look at the map to see the exact location of the house. Satellite views are helpful to capture proximity to train tracks, major thoroughfares, and neighboring properties.
5. View the home with pictures, floor plan or the virtual tour
6. Look up the community online for amenities or even call the HOA. Many of them will give you some insight into community events and restrictions if you have a must-have need that may not be allowed.
7. Look up schools, crime, HOA, and FEMA information if you have any concerns that could be could be a deal killer.
8. Only go see homes that pass the above checklist
9. Go early in the day so that it is a pleasant experience.
Have Facebook? Here’s a link to my Home Buying Tips video.
Looking for more data on the Austin housing market? See Austin real estate news for August article here.