What if you could read Austin’s housing market like a local pro? You do not need a finance degree to understand what is driving prices, speed, and competition in Travis County. You just need a few key metrics and a simple way to connect the dots. In this guide, you will learn the plain-English meaning behind inventory, days on market, months of supply, and price trends, plus how jobs, mortgage rates, and new construction shape your options. Let’s dive in.
Austin’s market comes down to three forces: supply, demand, and friction. Supply is the number of homes for sale and the pace of new listings. Demand is the number of buyers closing each month, which is influenced by job growth, migration, and mortgage rates. Friction covers things like permitting speed, zoning, and seasonality that make supply slower or faster to respond.
Historically, Austin has been a high-growth metro, which means it reacts quickly to changes in interest rates and hiring. When rates fall or tech hiring accelerates, demand jumps. When rates rise or hiring slows, competition eases. Local permitting and development constraints can also limit how quickly new homes reach the market, which affects prices even when demand cools.
Active inventory is the number of properties for sale right now. When it is low relative to recent norms, you tend to see faster sales and stronger seller leverage. When it rises, buyers usually gain options and negotiation power. Keep in mind that some active listings are stale or re-listed, so look at price reductions and total days on market to get the full picture.
New listings are how many properties hit the market in a given week or month. A high flow of new listings can still feel tight if sales are keeping pace. If new listings rise while closed sales fall, that usually signals cooling demand. Builders and re-listings can inflate this number, so it helps to distinguish new construction from resale when possible.
Closed sales show demand that actually finished the journey. Compare closed sales with active inventory and new listings to see whether buyers are absorbing supply or whether inventory is building. This ratio tells you a lot about near-term price pressure.
Months of supply tells you how long it would take to sell the current inventory at the recent sales pace. The simple formula is:
As a rule of thumb in Austin:
Absorption rate is the flip side:
Higher absorption means faster market turnover. Because Austin has been a fast-growing market, months of supply under 3 often lines up with multiple offers and rising prices. Use 3- to 6-month rolling averages to smooth seasonal swings.
DOM measures how long a home takes to go under contract. Lower DOM means buyers are moving quickly, and higher DOM points to cooling demand. Note that DOM can reset if a listing is withdrawn and re-listed. Ask whether the number shown is cumulative DOM or days since the most recent list date.
Median sale price is the middle sale price in a given period. It is less affected by outliers than an average. Rising medians point to upward pressure, but context matters. If more higher-end homes or new construction close in a given month, the median can rise even if price per square foot is flat. For a fuller view, combine median price, price per square foot, sale-to-list price ratio, and median DOM.
This ratio is the final sale price divided by the list price, expressed as a percent. Above 100 percent usually shows bidding pressure and over-list outcomes. Below roughly 98 percent suggests more negotiating room. Remember that concessions and unique property features can skew this number, and new construction often lists differently than resale.
Net in-migration and population growth add steady housing demand. Austin and Travis County have benefited from jobs and lifestyle draws, which supports buyer activity even when national conditions are mixed.
Tech, creative industries, healthcare, and education drive a significant share of local purchasing power. When employers expand, more buyers enter the market. Employment slowdowns can ease competition, though price effects may lag a few months.
Mortgage rates directly affect what you can afford. A 0.5 to 1.0 percent rate shift can materially change payments and buyer demand. In Austin’s historically competitive market, rate drops can quickly tighten conditions. Rate rises often expand inventory and lengthen DOM.
Permitting timelines, lot availability, and zoning shape how quickly new homes hit the market. If supply cannot keep up, resale prices stay supported. When new communities open nearby, they can also pull buyers from older listings, affecting pricing and time on market for resale homes.
Spring tends to see more new listings and more closings. Winter is typically slower. Compare the same month year over year, or use multi-month averages, rather than reacting to one month’s moves.
When prices grow faster than incomes, fewer households can buy at current levels. That can redirect demand to different price bands or farther suburbs. Property taxes and local rates also affect ownership costs, which some buyers weigh alongside location and commute needs.
Use local MLS reporting from the Austin Board of REALTORS to see the latest inventory, sales, DOM, months of supply, and prices. Then walk through this short playbook:
These are examples to show the math, not current Austin data:
You do not have to guess. With a simple framework and local data, you can make confident decisions whether you are buying, selling, or investing in Travis County. If you want a tailored read on your neighborhood, pricing strategy, or timing plan, schedule a Strategy Session with a trusted local advisor. Connect with Courtney Unangst to get a clear plan that aligns with your goals.
We pride ourselves in providing personalized solutions that bring our clients closer to their dream properties and enhance their long-term wealth. Contact us today to find out how we can be of assistance to you!