The September 8, 2025 Monday Touch Point highlighted softer absorption, with the new listing-to-pending ratio starting the week at 0.46. This points to slower momentum compared to late August, though the figure is expected to climb as pending updates are added. Active inventory sits at 17,105 listings, with 57.9% showing a price drop, down slightly from the summer peak. Short sales have surged to 70 actives, more than doubling year-over-year, as homes purchased at the 2021–2022 peak come under pressure. Affordability has improved to its strongest September since 2020, with the median sold price at $415,000—down 24.5% from the May 2022 peak—creating new opportunities for buyers as mortgage rates dip below 6%. 

The Austin real estate market is entering September with mixed signals that highlight both improving affordability and renewed investor interest, but also a slower pace of absorption compared to the momentum seen in late summer. Today’s Monday Touch Point underscored the importance of watching leading indicators closely, as they reveal more about where the market is heading than lagging figures such as closed sales.

Leading Market Indicators: A Softer Start to September
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The most important number this week is the new listing-to-pending ratio, which opened at 0.46. That means fewer than half of new or back-on-market listings are currently being absorbed by buyers. While this figure will rise as pending updates are added over the next few weeks, it suggests that September may not match August’s strength. In fact, compared to September 2024, which finished at 0.80, the market is already showing signs of being slightly softer.

This slowing comes at a time when mortgage rates are at their best levels in a year, an unusual divergence that speaks to a more cautious buyer pool despite improved financing conditions.

Bond Market Shifts and Investor Behavior
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Falling bond yields are the story behind the improved rate environment. The six-month Treasury yield, a common benchmark for investors, is now below the cap rates in 23 Austin-area ZIP codes. This means rental property investments in these areas are outperforming the short-term bond alternative, a reversal from much of the past two years. Historically, whenever cap rates edge above Treasury yields, investor activity begins to climb, and that pattern appears to be re-emerging in Austin.

Inventory, Price Reductions, and Withdrawals
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Active inventory stands at 17,105 homes across the Austin area. Nearly 58% of those listings have taken a price drop, a figure that remains high but is slightly below the 60% level reached earlier this year. More concerning is the massive volume of withdrawn and expired listings: over 16,200 so far this year, a number greater than the total active inventory itself. Many of these homes are likely to reappear in the spring, setting up the possibility of Austin surpassing 20,000 active listings in 2026.

For sellers, the data suggests a tactical advantage in listing this fall. Entering the market in October or November could allow sellers to capture the seasonal December bump, when fewer new listings come online but buyer activity remains steady. Waiting until spring could mean competing against tens of thousands of other listings.

Short Sales on the Rise
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One of the clearest stress signals in the market is the rise in short sales. There are currently 70 active short sales, compared to just 28 at the same time last year. Many of these properties were purchased in 2021 or 2022, at or near the market peak, often using FHA financing. In communities such as Hutto, short sales are creating downward pressure on prices, with average reductions of more than $60,000.

Although only 24 short sales have closed this year, the sharp increase in active distressed listings is a leading indicator of potential pricing pressure in certain ZIP codes and price segments.

Pricing and Affordability Trends
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The median sold price in September is holding at $415,000. This represents a decline of 24.5% from the May 2022 peak, or a 31% decline when adjusted for inflation. This dramatic reset has reshaped affordability in Austin. The median price-to-income ratio has returned to its lowest September reading since 2020, reversing the extreme affordability crisis of 2021 and 2022.

For buyers, the combination of sub-6% FHA, VA, and USDA mortgage rates and median pricing in the low $400,000s creates the most favorable entry point in several years. For sellers, it underscores the reality that peak values will not return quickly; at Austin’s long-term appreciation rate, the city is not expected to revisit its 2022 highs until 2032.

Market Flow and Forecast
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The Market Flow Score, which combines multiple metrics to gauge the overall strength of the market, finished August at 5.44. This is the best reading of 2025 so far, though still below the long-term average of 6.6. September has historically been a slower month than August, and early data suggests that trend will continue. Still, compared to the volatility of the past two years, the current market appears stable, even if softer than buyers and sellers might hope.

Strategic Takeaways
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For buyers, this is a window of opportunity defined by improved affordability and financing conditions. Acting now, with the option of lock-and-float strategies, provides a hedge against uncertainty in the upcoming Federal Reserve meeting. For sellers, strategic timing matters more than ever. Listing in the fall may offer better odds of standing out, while waiting for the spring could mean facing overwhelming competition.

The Austin real estate market continues to evolve rapidly, but one theme remains constant: tracking leading indicators like the new listing-to-pending ratio and activity index provides the clearest window into what comes next. September may not match August’s strength, but the broader trend toward improved affordability positions Austin as a market worth watching closely.​