How rising mortgage rates are impacting the Austin housing market

AUSTIN (KXAN) — As Austin home prices continue to soar, property taxes increase and mortgage rates keep ticking up, prospective buyers are asking, "is something finally going to give?"

The short answer is no.

"Truly, we haven't seen that impact our market," said Austin Board of Realtors President Cord Shiflet. "We're a demand-based market, we've got buyers coming in here by the droves, and everybody needs a place to go."

ABoR's latest housing report from March shows the median sale price of homes, townhomes and condos in the Austin-Round Rock MSA was $521,100. That price is up 22% year over year.

While those buyers keep coming in from outside of Austin, Shiflet said local buyers, particularly first-time homebuyers, are the ones getting priced out.

"It's going to be people that are in the lower price range," Shiflet said." A half-million [dollars] and under is where we're going to really feel that pressure. People that are scraping together to get their first home bought, and that are a lot more price-sensitive. Obviously, a higher rate means a higher payment."

The 30-year fixed mortgage rate was 5.11% on Monday, according to Zillow.

While Shiflet said you shouldn't expect home prices to drop, there may be some hope for falling mortgage rates later this year.

He said local economists are looking toward the fall for a potential change.

"As the election cycle comes in, hopefully we'll see rates come back down a little bit," he said. "But we don't see our housing market changing. We continue to struggle with lack of inventory. We're continuing to putting pressure on our local officials to make affordable housing."