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Cool down check-in: Study says Austin home prices unlikely to drop within the next year

(Pexels)

Nationwide housing prices could be due for a breath of fresh air—economists say inventory is spiking while the Federal Reserve puts pressure on mortgage rates—but Austin may have to wait a while.


A report from Fortune and CoreLogic, predicts that home prices will rise by 5% between May 2022 and May 2023. However, some industry experts say that lagging data could be hiding rapidly dropping prices.

Austin may have to wait it out, as the report says the city has a “very low” or 0%-20% chance of seeing home prices drop in the region.

In its report, CoreLogic said it looked at 392 regional markets and found that only 98 of them had higher than a 50% chance of dropping in price. Austin was one of 84 markets in the “very low,” while no studied market in Texas rose above the “low” category.

While Austin has seen more than a 200% increase in inventory in 2022, CoreLogic said it also comes in as 60% overvalued.

While the nationwide mortgage rate floats around 5.5%, firms like John Burns Real Estate Consulting and Moody's Analytics predict that “bubbly” markets—which saw home prices spike outside of the economic norm—are slowing the most right now.

CoreLogic argues that those inflated markets are vulnerable due to pandemic-induced population decrease, or in Austin’s case, strained affordability.

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