The cost of buying a house in Williamson County and the greater Austin area has stabilized while sales remained flat or down in January, according to a report released this week.
Leasing single-family houses, townhomes and condos, however, is on the rise as an affordable alternative for first-time homebuyers who are deferring purchases in the hope mortgage interest rates will come down.
In Williamson County in January, according to the most recent data, there were 623 home sales, down about 1% from the same month last year, according to Unlock MLS and the Austin Board of Realtors.
The median sales price of
“
(Williamson County) used to be an affordable market for firsttime homebuyers, but it has lost its edge.”
— Clare Knapp, housing economist for Unlock MLS houses was down 7% to $400,000. That makes it slightly more affordable than the median for the five-county Austin-Round Rock-San Marcos Metropolitan Statistical area of $409,765 and well below the Travis County market with a median of $475,000.
In Eastern Williamson County, prices were on the rise.
In the 76574 ZIP code that includes Taylor, the median price of 13 January house sales increased 6.3% to $319,000.
In the 78634 ZIP code that includes Hutto, the median sales price on 30 houses sold in January increased 6.7% to $350,312.
Inventory remains somewhat tight with 3.8 months of housing on the market in the Taylor area, but loosened in the Hutto area with 5.1 months of inventory in January compared to 1.6 months the previous January.
A balanced market usually occurs when there are about six months of inventory available, analysts said. Lower numbers make it a seller’s market and higher inventory is usually to the advantage of the buyer.
However, high interest rates that have remained around 7% the last few years mean monthly payments are higher than many first-time homebuyers or those wanting to trade up can afford. Meanwhile, sellers are asking for prices more in keeping with the beginning of the decade when houses were selling for record prices, in part because of mortgage rates at 3% or less.
Housing prices in the region peaked in the spring of 2022 with a median well over $500,000. Even though prices have come down recently, prices in the Austin-area market rose an average of 40% over the last five years, said Clare Knapp, housing economist for Unlock MLS.
Williamson County “used to be an affordable market for first-time homebuyers, but it has lost its edge” as prices crept up, Knapp said. Dozens of new housing developments are in the works across the county including many in East Williamson as thousands of jobs move into the area.
The good news, she added, is that mortgage rates stabilized to a sustainable rate of 6.08% to 7.2% last year compared to wild upward swings in 2023. Also, there “is a significant uptick in housing supply,” which is expected to further stabilize prices, she said.
Leasing, not buying
Leasing houses is becoming an increasingly popular alternative while interest rates stay high and inventory tight.
Austin Board of Realtors and Unlock MLS for the first time began tracking single-family dwelling leases in the area. The statistics do not include apartment leases.
In Williamson County, the median monthly lease on houses in January was down 4.3% to $2,100. The number of closed leases was up 6.1% to 582 and there were 1,271 active leases on the market by the end of the month.
In 2024, the Austin area had about 30,000 closed home sales and 26,000 closed leases, Knapp said.
For the region, there were 1,871 closed leases, up 11.7% from last January, and the number of active lease listing on the market was up 8% to 4,246.
The median price to lease a house or condo was down 1.3% to $2,195 a month. That’s about the same as a payment on purchasing a $330,000 house at 7% interest on a 30-year loan but not including escrow payment for property taxes that would add hundreds of dollars to the monthly payment.
The problem, Knapp said, is that not enough new houses priced at under $400,000 are being built where demand is highest.
While Knapp forecasts housing prices to remain stable with a rise of no more than 5% in 2025, there is a wild card in the form of tariffs imposed by the latest Trump administration on goods imported to the United States.
There is a pause for negotiations on a 25% tariff on Canadian goods, but if reinstated it could have a major impact on the price of things like lumber and steel, analysts said.
What’s more, fuel prices and building materials made from petroleum could rise because 60% of the U.S.’s oil imports are from Canada and tariffs on goods and commodities from other countries are paid by the U.S. importer and passed on to the customer.
