Austin Real Estate Market Update – May 22, 2025

Austin Housing Market Hits 25-Year Absorption Low as Inventory Surge Widens the Gap

The Austin housing market continues to drift deeper into correction territory, with new data released for May 22, 2025, revealing the most significant imbalance between new listings and buyer demand in over two decades. Since January, 23,087 new residential listings have entered the Austin-area MLS, while only 17,518 homes have gone pending. That 5,569-unit shortfall is the largest absorption deficit on record for this time of year, underscoring a structural supply-demand mismatch that continues to reshape the local real estate landscape.

Months of Inventory (MOI) has climbed to 6.04, up from 4.92 one year ago—a 22.7% increase year over year. With MOI above six months, the market is now firmly in buyer territory. Inventory has surpassed last year’s levels and is holding just below the all-time high of 17,077 active listings recorded earlier this week. As of May 22, there are 16,971 active listings across the Austin-area MLS. This continued rise in unsold inventory is putting substantial pressure on pricing and seller strategy.

The New Listing to Pending Ratio is another critical indicator flashing red. For May, the ratio stands at 0.54, meaning only one contract is written for every two new listings entering the market. Year to date, the ratio is 0.66—well below the 25-year average of 0.81. This absorption slowdown shows no signs of recovery, especially as new listings surge. So far in 2025, listing activity is 25.8% higher than the historical average, driven by a wave of sellers trying to enter before summer—yet buyer urgency remains muted.

The Activity Index, which measures the percentage of active listings that are under contract, remains at 22.9%, down from 26.6% one year ago. This drop in engagement is consistent with longer days on market and increased price reductions. Across the MLS, 51.5% of active listings have experienced at least one price drop. In Austin proper, which currently has 5,346 active listings, 53.0% of homes have reduced their price. Suburban markets show similar or more aggressive reductions, with Liberty Hill leading at 57.8%, followed by Lago Vista at 60.8%.

At the city level, inventory growth is becoming more pronounced. Marble Falls saw MOI increase from 4.98 in January to 11.00 in May—a 120.7% surge. Cedar Park more than doubled from 1.93 to 3.99 (up 106.2%), while Leander rose from 3.32 to 5.98 (an 80.4% increase). In contrast, only a few markets have seen a decrease in inventory this year. Del Valle’s inventory dropped 12.7%, and Hutto posted the sharpest decline at 29.7%, offering rare exceptions to the regional oversupply trend.

Pricing continues its downward trajectory, reflecting the broader market correction. The median sold price in May 2025 is $457,250, down 16.9% from the May 2022 peak of $550,000. The average sold price is $597,737, representing a 12.4% decline from the May 2022 peak of $681,939. These reductions confirm that the reset is occurring across all price points, affecting both entry-level and luxury segments. The weakening in both median and average prices reinforces that sellers are adjusting not just to seasonal patterns, but to a structural shift in buyer behavior and leverage.

Together, these metrics tell a clear story: despite higher listing volume and increased seller participation, the Austin housing market is slowing in terms of absorption and pricing. The imbalance between new listings and contract activity, now at a 25-year low in terms of absorption, is the defining dynamic of this market. While competitively priced homes may still attract buyers, most properties are experiencing longer market times, more negotiation, and elevated pressure to reduce prices.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for May 22, 2025

Embedded PDF: Austin Daily Real Estate Briefing for May 22, 2025 — includes updated statistics on inventory, pricing, buyer demand, and market trends across the Austin area.

Austin Real Estate Market – Frequently Asked Questions (May 22 2025)

What is the current state of the Austin housing market as of May 2025?

As of May 22, 2025, the Austin housing market is marked by significant oversupply and weakening demand. Active residential listings have reached 16,971, just below the record high of 17,077 set three days earlier. Year-to-date, new listings total 23,087—25.8% above the historical average and the highest on record since 2004. However, only 17,518 homes have gone pending in that same time frame, producing a 5,569-unit gap—the largest five-month absorption deficit in over 25 years. This imbalance has pushed the New Listing to Pending Ratio down to 0.54 for May and 0.66 year-to-date, far below the long-term average of 0.81. The Activity Index, measuring the percentage of active listings under contract, sits at 22.9%, down from 26.6% a year ago. These metrics confirm a slower, buyer-leaning market cycle defined by rising inventory, declining urgency, and growing leverage for buyers.

How much housing inventory is available in the City of Austin right now?

As of May 22, 2025, the City of Austin has 5,346 active residential listings, continuing a trend of elevated supply. The city’s Months of Inventory (MOI) has climbed to 6.03, up 38.5% from 4.36 in January and 31.8% higher than in May 2024. MOI above 6 is considered firmly within buyer’s market territory. Submarket trends show even sharper increases: Marble Falls now has 11.00 MOI (up 120.7% year-to-date), Cedar Park has jumped 106.2%, and Leander has increased 80.4%. However, some areas have contracted—Hutto’s MOI is down 29.7% and Del Valle has dropped 12.7%. These divergent trends highlight the need for hyperlocal strategy, as oversupply in one market may coexist with tightening conditions in another.

What does the New Listing to Pending Ratio of 0.54 indicate for the Austin housing market?

The New Listing to Pending Ratio at 0.54 means that for every 100 new listings, only 54 are going under contract. This is a significant drop from the 25-year average of 0.81 and reflects a low rate of absorption across the market. For sellers, this indicates elevated competition, longer days on market, and a growing need to reduce prices or offer concessions. In practical terms, homes that aren’t priced sharply are being overlooked. For buyers, this ratio translates into better negotiating power, more time to evaluate listings, and the ability to request repairs, credits, or price adjustments. It’s a clear signal that the market is favoring buyers across most price points and submarkets.

Is buyer activity increasing or decreasing in the Austin real estate market?

Buyer activity is decreasing. Pending listings from January through May total 17,518, down 14.0% from the same period in 2024 and 2.0% below the historical average. The Activity Index, currently at 22.9%, has fallen from 26.6% last May, reflecting declining contract velocity relative to inventory. This decline is occurring despite a surge in new listings, highlighting a market where supply is outpacing demand. Rising interest rates, affordability concerns, and elevated home prices are contributing to buyer hesitation. Many prospective buyers are waiting on further price adjustments or improved financing conditions. As a result, homes are sitting longer and require more aggressive pricing to generate offers.

How are Austin home prices trending in May 2025?

Austin home prices remain in a correction cycle. The median sold price in May 2025 is $457,250, down 16.9% from the May 2022 peak of $550,000. The average sold price stands at $597,737, a 12.4% decline from the peak of $681,939. These price drops reflect widespread reductions across all market tiers, with both lower-end and higher-end homes experiencing value declines. Although there may be isolated higher-end closings buoying average prices, the median price shows that most buyers are purchasing below previous highs. This ongoing softening is driven by rising inventory, reduced buyer competition, and increased pricing pressure across the region. Unless demand rebounds meaningfully, pricing is expected to remain flat or drift further downward through the remainder of 2025.

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