Freddie Mac House Price Index
The Freddie Mac House Price Index, commonly known as FMHPI®, is a tool that measures the typical price change for homes in the U.S. over time. Think of it like a yardstick for the housing market, showing how much home prices have gone up or down in different areas. This index is special because it doesn't just look at the prices of homes being sold; it also considers the price changes of the same homes over time. This way, it's more accurate than just looking at the average price of homes sold at any time, which can be misleading if, for example, more expensive or larger homes are being sold more often. The FMHPI® is valuable for several reasons: Understanding Trends: It helps us see the big picture of the housing market, showing whether it's a good time to buy or sell a home. Comparing Regions: You can compare how home prices are doing in different parts of the country. Making Decisions: If you're in the real estate business, like selling homes or giving out mortgages, this index can guide your decisions. Economic Indicator: Since the housing market is a big part of the economy, the FMHPI® can also signal how the overall economy is doing. In professional real estate work, the FMHPI® is a trusted source for gauging the health and direction of the housing market, helping with everything from making investment decisions to setting policy.
Austin Housing Market Trends: Freddie Mac House Price Index (FMHPI®) – Updated January 2025
The Freddie Mac House Price Index (FMHPI®) continues to provide key insights into the dynamic housing market across the U.S., offering a detailed analysis of price movements within major metropolitan areas. The latest data for December 2024 highlights Austin’s ongoing market correction and how it compares to other cities nationwide.
During the pandemic, Austin’s housing market experienced one of the fastest appreciation rates in the country. Home prices in the Austin-Round Rock-Georgetown area surged 40.2% from January 2020 to their peak in May 2022. However, as economic conditions shifted, affordability concerns grew, and interest rates climbed, Austin saw a steep 15.8% decline from its peak, making it one of the most pronounced market corrections in the nation.
As of December 2024, Austin’s year-over-year home price change stands at -2.5%, reflecting continued softness in the market. This contrasts with the national average, which has seen a 3.6% year-over-year increase. Compared to other major Texas metros, Houston is down 2.0% year-over-year, San Antonio has dropped 2.3%, and Dallas has seen a 2.2% decline. These figures highlight Austin’s sharper correction, distinguishing it from other major Texas housing markets.
Austin’s price decline is steeper than some of the largest markets in the U.S. San Francisco has seen a 5.7% drop from its peak, while San Jose and Portland have experienced declines of 3.3% and 3.8%, respectively. However, Austin’s market has still outperformed Phoenix, which is down 1.3%, Denver at -4.1%, and Sacramento at -4.8%, signaling that while the correction has been significant, some cities have faced even more turbulence.
Several key factors have contributed to Austin’s volatile housing market. The rapid migration and tech-sector growth during the pandemic fueled record-breaking demand, but high mortgage rates and reduced buyer affordability led to a market cooldown. Even after the price correction, Austin remains one of the least affordable housing markets in Texas, keeping some buyers sidelined. Rising mortgage rates have further dampened demand, making it harder for buyers to qualify for homes at pre-2022 price levels. Despite these challenges, Austin’s strong job market and continued business expansion provide long-term market resilience.
While Austin’s home prices have seen a significant decline from their peak, the rate of monthly declines is slowing. This suggests that the market may be approaching equilibrium. Buyer interest is starting to return as inventory levels normalize, mortgage rate expectations shift, and sellers adjust their pricing strategies.
Looking ahead to 2025 and beyond, the future trajectory of Austin’s housing market will depend on several factors. Mortgage rates will play a significant role—if rates decline, more buyers may re-enter the market, boosting demand. Job growth and population trends will continue to shape housing dynamics, as Austin’s status as a major tech and business hub remains strong. Inventory levels will also be a critical factor, as a supply-demand rebalance could further slow price declines and pave the way for price stabilization or even modest appreciation.
For buyers, Austin’s price correction presents a rare opportunity in what has historically been a highly competitive market. While affordability remains a challenge, lower prices and stabilizing conditions may create favorable conditions for those looking to enter the market before interest rates shift again. For sellers, pricing strategy is key. The market is adjusting, and while demand exists, buyers remain cautious. Competitive pricing and understanding current trends will be crucial for success in 2025
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