Where the Market’s Headed: Central Texas Real Estate Outlook for Late 2025

What We’ve Seen So Far in 2025:

So far, 2025 has brought a slower-paced, buyer-friendlier shift to the Central Texas real estate market. Active listings in the Austin-Round Rock metro jumped 17% year-over-year in May, reaching nearly 14,700 homes.

That pushed months of inventory up to five months—a dramatic increase compared to the tighter conditions of 2021–2022 (Unlock MLS, May 2025).

At the same time, closed sales declined 3.8%, and the median home price in the region dipped 1.6% to $449,900 (Unlock MLS, May 2025). That’s the kind of balance we haven’t seen in years—and it’s changing the way both buyers and sellers are approaching the market.

What’s Actually Happening on the Ground:

Buyers aren't flooding open houses, and they’re not rushing into bidding wars. In fact, the absorption rate in Austin in April was just 21.6%—a clear sign that homes are sitting longer and buyers are proceeding with caution (MySanAntonio, April 2025).

Price reductions are becoming the norm. As of May 2025, 50% of active listings across the region had dropped their prices, with Austin homes averaging a 6.6% cut from their original list (Team Price Realty, May 2025). Meanwhile, average days on market rose to 75+ days in many submarkets, especially for homes that aren’t competitively priced or turnkey ready (RealEstateInAustin.com).

Inventory is climbing: but it’s still uneven. Some neighborhoods have plenty of options, while others—especially for entry-level buyers—remain tight. And while builders are continuing to deliver new homes, those too are subject to longer timelines and softer pricing trends (Texas Real Estate Research Center).

Rates & Affordability: Mortgage rates remain in the mid-to-high 6% range, with some fluctuation based on loan type and credit profile. For many would-be buyers, this has become the single biggest hurdle to affordability. According to Axios Austin, there’s little expectation of a significant drop in rates before the end of the year (Axios Austin, July 2025).

What to Expect in Late 2025

• Rates Likely to Stay Elevated: Without major changes to inflation or the labor market, most analysts expect rates to stay in the same band through the rest of the year. Modest Fed movement is possible in Q4, but not guaranteed (MarketWatch, July 2025).

• Buyers Have Leverage: More inventory + cautious demand = power shifting to buyers. That doesn’t mean rock-bottom pricing, but it does mean more negotiating room, more concessions, and less pressure to overpay.

• Sellers Must Adjust: Those still pricing based on 2021 comps are learning the hard way. If your home isn’t priced right or presented well, it will sit. The most successful listings are offering incentives like closing cost help, rate buydowns, or move-in-ready features.

• Smart Buyers are Thinking Ahead: Buyers who lock in now are often doing so with a 12–24 month plan to refinance as rates soften over time. This market favors people who are playing the long game and understand how to structure a deal to maximize equity and cash flow.

  
  

My Advice: If you're looking to buy, sell, or invest in Central Texas in the second half of 2025, this is a market where strategy matters more than speed.

Buyers should be pre-approved, informed, and clear on what they want—because while there’s more opportunity now, the best properties still move fast.

Sellers should be working with pros who understand how to market, price, and structure incentives that match what today’s buyers need.

And if you’re just trying to make sense of it all, I’m here to help you cut through the noise and build a smart, data-backed plan.

Let’s get to work.

-Alejandro Juarez

Loan Officer

NMLS 1540814

512.897.4638