Austin, Once a Migration Hotspot, Is Losing Homebuyers to Other Cities For First Time on Record.
ENPNewswire-October 26, 2023--Austin, Once a Migration Hotspot, Is Losing Homebuyers to Other Cities For First Time on Record
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Release date- 25102023 - SEATTLE - (NASDAQ: RDFN) - More homebuyers looked to leave Austin, TX than move in during the third quarter, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
That's the first time on record there hasn't been a net inflow into the Texas capital. Redfin's records go back through 2017.
The number of Austin-based Redfin.com users looking for homes outside the metro area has more than doubled over the last year.
This marks a stark reversal for Austin, which was a magnet for out-of-town homebuyers looking for a more affordable place to live even before the pandemic. Once the pandemic began, ushering in an era of remote work and record-low mortgage rates, Austin's popularity boomed: It was the number-one U.S. migration destination in the beginning of 2021.
Austin has fallen out of favor with relocating homebuyers for several reasons: Rising home prices. By mid-2022, when Austin home prices peaked, prices were up more than 75% from before the pandemic. Austin prices have since declined from that peak, but homes are still much more expensive than before the pandemic. The gap between Austin's home prices and those of where homebuyers commonly move from, like Los Angeles and San Francisco, is smaller than it used to be.
Monthly mortgage payments have doubled since before the pandemic. Soaring mortgage rates exacerbated Austin's affordability problems, making monthly housing payments even more expensive than they already were with increasing prices. Today's typical monthly payment for Austin's median-priced home ($455,000) at this week's average mortgage rate (7.63%) is $3,890, nearly double 2019's typical payment of $2,136 (median sale price of $320,000; average mortgage rate of 3.94%).
Some homebuyers who moved to Austin are leaving. Austin Redfin agents report that some formerly remote workers moved back to their home city after being called back to the office, and a few others are moving back after trying Austin and realizing it's not a long-term fit. Some others are likely leaving Austin to be closer to major job hubs as the labor market starts slowing.
Slowing migration is good news for Austin locals looking to buy. Austin's median home price is down about 5% year over year, the biggest decline in...
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