The Austin housing market continues to shift: higher inventory, deeper price cuts, and slower buyer demand point to a full transition into buyer territory.

The data from July 28, 2025, reinforces a clear narrative in the Austin housing market: inventory is plentiful, price corrections continue, and buyer demand remains tepid. Active residential listings currently stand at 17,910, just 166 units shy of the all-time high reached on June 27. This inventory level marks a 15.7% increase year over year, up from 15,486 listings in July 2024. While this growth might suggest opportunity, the broader picture reveals a market struggling to rebalance as supply continues to outpace demand.

A notable 58.9% of all active listings in the MLS have undergone at least one price reduction. Price activity across major submarkets like Leander (64.5%), Lakeway (64.8%), and Cedar Park (65.3%) confirms that downward pressure is widespread and not isolated to weaker segments of the market. Even core Austin listings reflect a softening trend, with 59.0% of listings experiencing price drops. Only 1.8% of listings across the MLS have increased in price, reinforcing a dynamic of concession over competition.

Cumulative new listings from January to July 2025 total 33,392, reflecting a 5.8% increase over last year and 26.0% above the long-term average. Despite this surge in inventory inflow, buyer activity is not keeping pace. Year-to-date pending contracts are down 6.6% compared to 2024, totaling just 26,115 through July. This divergence has created a growing inventory backlog, with a cumulative new listing-to-pending difference of 7,277—highlighting a substantial demand shortfall.

The Activity Index, which measures pending listings as a percentage of total actives, has fallen to 19.8% from 22.3% a year ago, an 11.2% drop. This metric, critical for gauging real-time buyer engagement, underscores a cooling sentiment among purchasers. For reference, a healthy balanced market typically supports an Activity Index between 30% and 35%. In Austin, the figure is not only below average—it’s bordering on historical lows.

Monthly absorption confirms this trend. The current Monthly New Listing to Pending Ratio is 0.64, which means for every pending sale, 1.56 new listings are being added to the market. The 25-year average for this metric is 0.81, making the current pace of absorption significantly weaker than historical norms. The year-to-date ratio mirrors this imbalance, holding at 0.67—a figure that signals a system under strain and tilted firmly in favor of buyers.

Months of Inventory has now reached 6.41, up from 5.51 in July 2024—a 16.3% increase. Many individual cities and submarkets show even steeper year-over-year rises. For instance, Leander jumped from 3.57 to 5.59 months of inventory (up 56.4%), while Cedar Creek more than doubled from 4.31 to 9.12 months (up 111.5%). This expansion of available homes suggests not just a supply-heavy market, but a sluggish absorption rate that compounds over time. In a few outlier communities like Dale, Spicewood, and Smithville, inventory now exceeds 11 months.

Sales velocity is weakening in step with these trends. The number of sold properties in July 2025 is 2,778, bringing the cumulative total for the year to 17,951—down 4.4% compared to the same period in 2024. While this figure is still 8.0% above the 25-year average, it's important to note the declining momentum in light of rising inventory. The sold-to-active ratio is just 11.28%, a far cry from the historical average of 31.84%, indicating much slower turnover.

Price metrics further illustrate the ongoing correction. The average sold price now stands at $585,221, representing a 14.2% drop from the May 2022 peak of $681,939. More revealing is the median sold price, currently at $443,763, down 19.3% from the May 2022 peak of $550,000. When viewed from a 36-month trailing perspective, the current median price is 13.8% lower than it was three years ago, confirming that the correction has been both prolonged and deep.

Looking ahead, Team Price’s 25-year appreciation benchmark of 4.922% provides a useful lens. If the current correction has indeed found its floor, then projecting from the current median price of $443,763, it would take until February 2030—approximately 56 months—for prices to return to their previous peak of $550,700. This projection assumes a stable compound growth rate without further disruption, which underscores just how long recoveries in pricing can take after a sharp peak-to-trough reset.

Interestingly, the price compression is consistent across market segments. The bottom 25th percentile of homes saw a 2.98% drop in sales price year over year and a 4.44% decline in price per square foot. The top 25th percentile fared only marginally better, with a 1.55% decline in sales price and a 1.33% dip in price per square foot. This symmetry suggests that all market segments—from entry-level to luxury—are feeling the weight of correction pressure.

The Market Flow Score, a composite indicator of absorption efficiency and turnover velocity, now stands at 1.85 on a scale of 0 to 10. Historically, Austin averages a score of 6.59. Today’s figure emphasizes the imbalance between supply and demand and reflects a market losing momentum, not gaining it.

In summary, the Austin housing market is firmly in a buyer-driven cycle. Supply is abundant, prices are softening across all submarkets, and demand remains hesitant. Sellers are increasingly forced to adjust expectations and pricing strategies, while buyers gain leverage in negotiations. With interest rates still fluctuating and affordability stretched, recovery may be gradual. The fundamentals of demand are not broken—but they are lagging behind an unrelenting wave of new supply. If you're active in today’s market, whether as a buyer, seller, or investor, understanding this shift is essential for positioning yourself wisely in the quarters to come.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for: July 28, 2025