Home sales in the five-county Austin metro declined 8% year-over-year in February after the winter storm "thwarted housing market activity for nearly two weeks," according to the Austin Board of Realtors' latest monthly report. This is the first time sales have dipped since June 2020, but the organization expects a quick recovery given that demand remains high.

"Although the winter storms slowed activity in February, this does not indicate a market slowdown," ABoR President Susan Horton said in a statement. "We're still very much in a seller's market."

Despite the decrease in the number of sales last month, the median home price continued to rise—increasing 22.5% year-over-year to an all-time high of $395,000. Market demand also drove the housing inventory down to a record low of 0.4 months of inventory, which means that if no other homes were listed the current inventory would sell in a week. A balanced housing market has 6 to 6.5 months of inventory, according to the Texas Real Estate Research Center.

Low inventory is not a new problem in the Austin housing market. But combined with a nationwide inventory shortage and rising mortgage rates, it could leave prospective homebuyers in a vice grip. "Until we have more supply, the lack of inventory and prices rising nationwide are going to present challenges for homebuyers," National Association of Realtors Chief Economist and Senior Vice President of Research Lawrence Yun said in a statement.

Market trends in the city of Austin mirrored those in the larger metro, according to the report. Sales decreased 4.6% year-over-year to 834 in the month of February, while the median sales price spiked 24.3% to $491,000—an all-time high—over the same time period. Inventory also fell slightly, from 0.6 months to 0.5 months.