Austin home prices and rents plunge as oversupply meets rising mortgage rates

Austin’s once-soaring real-estate market has reversed sharply, with Realtor.com reporting a roughly 25% decline in asking prices—the largest drop of any large city. The slowdown stems from an oversupply of new homes and a sharp rise in mortgage rates that began in early 2022. Rental prices have also softened, forcing landlords to cut rates to attract tenants.

Buyers who purchased at pandemic highs are now listing for as much as 30% below purchase price, battling new-home developers who can bundle cheaper financing with modern amenities. Some owners, like Ryan McPherson, are opting to sell at a loss rather than continue to shoulder high mortgage costs. Despite the downturn, economists note that Austin’s strong job growth and demographic trends could support a future rebound.