AUSTIN (KXAN) — Homebuyers are looking to leave Austin as housing costs stay high, according to a report by real estate brokerage Redfin.
“More homebuyers looked to leave Austin, TX than move in during the third quarter, the first time on record there hasn’t been a net inflow into the Texas capital,” the report claimed.
The report said data is based on the searches of about two million Redfin users who viewed for-sale homes online across more than 100 metro areas from July 2023 to September 2023.
Over the last year, more than double the amount of Austin-based Redfin.com users looked for homes outside the metro area, according to the report.
“Those high home prices have resulted in people needing to leave the Austin metro area for more affordable places, because now locals or even people who moved in during the pandemic, are realizing that it’s too expensive to live there,” Redfin Chief Economist Daryl Fairweather said.
Why is this happening?
Fairweather said fewer homebuyers are interested in Austin for several reasons:
- Rising home prices
- Monthly mortgage payments doubling since before the pandemic
- Homebuyers who moved to Austin are leaving
“Prices are still higher than they were before the pandemic but they’re not as high as they were at the peak,” Fairweather said. “That high cost of buying a home means that fewer people are able to afford to achieve homeownership in Austin, and they look elsewhere like San Antonio or Dallas or somewhere more affordable.”
Fairweather said another factor is remote workers being called back to headquarters.
“Amazon has called people back. Other corporations have called people back,” Fairweather said. “So maybe during the pandemic, it was this great thing that remote work allowed you to live wherever you want, but that’s becoming less common. People are coming back to the office.”
More housing inventory
Austin Board of Realtors Housing Economist Clare Losey said it’s difficult for them to pinpoint the exact migration of homebuyers on a monthly basis.
“It tends to take a while for that data to trickle in. But what we can say is that we have observed an uptick in active listings,” Losey said.
Specifically, Losey said there’s more choices for middle and upper-income buyers in the market but not necessarily as many affordable options.
“Homes priced below $300,000, there’s really an insufficient supply of those homes relative to the demand for those homes,” Losey said.
Losey said in September, less than 15% of homes sold for less than $300,000. However, she said the average income of first-time buyers is around $90,000.
“Their maximum affordable home price really is that upper range of $300,000,” Losey said. “So for first-time buyers, we really need more options in the market for sale.”
Increasing mortgage rates
Losey said the uptick in mortgage rates has impacted the demand for homes.
However, if potential buyers are waiting for mortgage rates to drop anytime soon, Losey said don’t hold your breath.
“It looks like mortgage rates will be elevated for probably a couple of months now into 2024,” Losey said.
Losey said the area is in this higher rate environment and it is somewhat here to stay.