Austin's housing market enters the fourth quarter with two things pulling in opposite directions. Prices and demand have softened, which normally helps buyers. At the same time, 30-year mortgage rates climbed back above 7% in early October, which takes some of that help right back. The Dillar Group has spent the past few weeks walking clients through how those two forces net out, and the honest answer is that it depends on where you are shopping and what you are selling.
What Changed in September
Freddie Mac's weekly survey put the average 30-year fixed rate at 6.76% in the week of September 10. By October 1 it had reached 7.28%. On a $400,000 loan, principal and interest at 6.76% comes to about $2,597 a month. At 7.28% it is about $2,737, roughly $140 more every month for the same house.
Date 30-Year Fixed Rate Monthly P&I on $400K
Sept 10th. 6.76%. ~$2,597
Oct 1 7.28% ~$2,737
A rule of thumb for buyers: at 7.28%, every $10,000 of loan costs about $68 a month, so a $140 jump in payment is the same as losing roughly $20,000 of purchasing power. Rates move weekly, so confirm the current number with a lender before relying on any figure here.
What the August Numbers Show
The most recent complete data from Unlock MLS shows the Austin metro median sale price at $412,000 in August, down 6.4% from a year earlier. Inventory has also grown. July showed 4.7 months of supply, compared with 3.5 months a year earlier. A balanced market is generally considered to be around six months, so Austin remains on the buyer-friendlier side of balanced, though not dramatically so.
Two other figures matter for the fall. Homes are taking roughly 74 to 90 days to sell depending on the area and price point, and sellers are receiving about 93.3% of their list price on average. In practical terms, the typical Austin home is selling for a few percentage points below its asking price after more than two months on the market.
What This Means If You're Buying
Buyers have more negotiating room than they have had in years. Longer days on market and a sold-to-list ratio under 94% mean that offers below asking, repair requests, and seller-paid closing costs are realistic requests rather than long shots.
The rate increase is the counterweight. A buyer who was comfortable at a $2,600 payment in early September may find the same budget buys less house in October. Two approaches The Dillar Group often discusses with buyers:
Negotiate price and credits together. Seller concessions toward a rate buydown can lower the monthly payment more effectively than a small price cut of the same dollar value.
Plan to refinance, but do not count on it. Some buyers purchase now and refinance if rates fall. That can work, but it is a possibility rather than a plan, so the payment should be affordable at today's rate.
What This Means If You're Selling
Sellers face a market where pricing matters more than almost anything else. With inventory up and buyers taking their time, an overpriced home tends to sit, collect price reductions, and end up selling for less than a correctly priced home would have.
Fall has a quiet advantage, though. The number of new listings typically falls as the holidays approach, which means a well-priced home faces less direct competition than it would in spring. Buyers who are searching in October and November are usually serious, because they are motivated by a job move, a school-year timeline, or the end of a lease.
"In a market with more inventory and higher rates, the sellers who do best are the ones who price to the data, not to the number they hoped for in 2022."
Local Context: City, Metro, and County Are Different Markets
The Austin metro number hides a lot of variation. City of Austin listings are down about 14.5% from a year ago in the latest data, which means less competition for sellers inside the city limits even as the metro as a whole shows more inventory. Williamson County pending sales were up about 9.3%, a sign that buyers are still active in the northern suburbs where prices are lower.
This is why a metro-wide headline rarely fits a specific street. A Tarrytown seller, a Mueller buyer, and a first-time buyer in Hutto are each operating in a different version of the Austin market. The Dillar Group pulls neighborhood-level comparable sales for every client before setting a strategy, because the metro median is a starting point and not an answer.
Heading Into Q4
Here is what The Dillar Group will be watching through the end of the year:
Weekly mortgage rates. A move back toward 6.5% would likely bring buyers off the sidelines. A move toward 7.5% would likely push more of them out.
Inventory. If new listings thin out for the holidays while demand holds, the buyer's advantage may narrow in the most popular neighborhoods.
Price reductions. The share of listings cutting prices is a useful early signal of where sellers' expectations are still ahead of the market.
The September data release. Official September figures are typically published in mid-October and will show whether August's softness continued.
For buyers, the main message is that there is real negotiating room, but it should be paired with a payment that works at today's rate. For sellers, the message is to price to the current data, prepare the home well, and treat the fall as a period with fewer competitors rather than fewer buyers.
If you're considering buying or selling in Austin this fall, The Dillar Group would be glad to help. Request a custom market report.
