Austin Housing Update: September 2025 Affordability Hits 3-Year Low

The Austin real estate market just hit its most affordable point in more than three years. In September 2025, the income required to purchase the median home in the Austin area dropped to $121,228, the lowest since February 2022 when the figure was $120,005. For buyers, this marks a critical shift after years of affordability pressures, as the market rebalances from the highs of the 2021–2022 surge.

Affordability in Context
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The affordability calculation reflects a 20% down payment, prevailing mortgage rates, and keeping PITI payments within 30.6% of income. By this standard, the median Austin home is finally within reach for households at income levels not seen since early 2022. This improvement comes after affordability peaked at extreme levels in May 2022, when buyers needed $147,600 in annual income to purchase the median property. Since then, falling home prices and some moderation in borrowing costs have steadily reduced the income requirement, bringing buyers more breathing room.

Five-Year and Ten-Year Trends
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Looking back five years highlights just how much the affordability landscape has changed. In September 2020, a household needed $79,539 to buy the median Austin home. By September 2025, that number had climbed to $121,228—a jump of $41,689, or 52.4%. Stretching back ten years makes the shift even clearer. In September 2015, the income requirement stood at $61,713. Over the decade, it nearly doubled, rising 96.4%. This long-run climb underscores the structural affordability challenge that Austin households face, even with recent relief.

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The Peak-to-Present Comparison

The clearest benchmark remains May 2022, when Austin home prices were at their peak. That month, households needed almost $147,600 to qualify for the median purchase. Today’s $121,228 requirement represents a meaningful reduction, but it still leaves affordability strained compared to long-term norms. The market has cooled, but the baseline has shifted far above the levels seen in 2015 or 2020.

What This Means for Buyers, Sellers, and Investors
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For buyers, this is the most favorable affordability window in 43 months. Lower required incomes open the door for more households to qualify, especially those who were priced out during the 2021–2022 frenzy. Sellers, meanwhile, must recognize that today’s buyer pool is more cautious and price-sensitive. Competitive pricing and realistic expectations remain essential to securing offers. For investors, the current environment offers a calculated opportunity. While values remain well below their 2022 highs, long-term income requirements are still nearly double those of a decade ago. This reflects both the strength of Austin’s housing demand and the importance of disciplined acquisition strategies in a slower market cycle.

Austin Real Estate Market Outlook
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The Austin housing market has entered a new affordability phase. The fact that September 2025 marks the lowest income requirement since February 2022 is a signal of stabilization, not collapse. Buyers who were waiting on the sidelines now face their best chance in years, while sellers must navigate a more balanced landscape. Looking ahead, affordability will hinge on two variables: the trajectory of mortgage rates and the stability of home prices. If rates ease further, affordability could improve again even without major price declines. Conversely, if borrowing costs rise, the recent gains could erode. What is clear is that affordability has come back into play for Austin real estate in a way it hasn’t since early 2022. For the first time in years, buyers, sellers, and investors alike are working in a market that feels closer to balance.

FAQs
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1. Why is September 2025 considered the most affordable point in recent years?

Because the income required to buy the median Austin home—$121,228—was the lowest since February 2022. This marks 43 months of improved affordability compared to higher-income requirements during 2022–2024.

2. How much has affordability changed in the last five years?

In September 2020, households needed $79,539 to buy the median home. By September 2025, that figure was $121,228, a 52.4% increase in just five years.

3. How does today’s affordability compare to the 2022 peak?

At the market’s peak in May 2022, buyers needed $147,600 to qualify. The September 2025 requirement of $121,228 reflects a significant improvement, though affordability is still well above historic norms.

4. What does this mean for buyers in Austin today?

Buyers now face the lowest entry point in over three years. While affordability has improved, households still need nearly double the income compared to 2015, meaning the market is more balanced but not cheap.

5. What is the long-term affordability trend in Austin real estate?

Over the past decade, the income required to purchase the median home nearly doubled, rising 96.4%. This highlights the structural affordability challenge in Austin housing, even as short-term conditions improve.​