OHA Market Update Series - Jan 6, 2025
National: Mortgage rates closed out 2025 at their lowest point in more than a year, offering buyers some welcome relief heading into 2026. While lower rates help, affordability remains tight—making strategy and timing more important than ever.
Local: Austin renters are benefiting from softer rents and increased concessions as new construction has outpaced demand—but that window may only last through 2026. With development slowing and population growth continuing, rent increases are likely to return by 2027.
Intrigued? Keep reading.
(4 minute read)
Austin Area Real Estate & Community Update:
Market Trends, Local News, and Neighborhood Insights
Austin Rent Relief Has a Clock on It
If you’ve been renting in Austin and it feels like the pressure has eased a bit—you’re not imagining it.
Austin’s rental market is still very tenant-friendly, and it likely stays that way through 2026. After years of explosive growth during and after the pandemic, construction simply outpaced demand. Thousands of new apartment units hit the market at once, and landlords have been forced to adjust. That’s why we’ve seen asking rents come down, more concessions on the table, and a lot more negotiating power for renters.
To put it in perspective: average asking rents are projected to drop to around $1,525 in early 2026, down from about $1,600 last year. Nearly two-thirds of apartment communities in Austin offered some kind of concession in 2025, and vacancy rates are still hovering around 10%, but this window won’t stay open forever.
New construction is slowing dramatically. After delivering nearly 33,000 units in 2024 and another 17,500 in 2025, Austin is expected to see fewer than 5,000 new units delivered in 2026. Fewer projects are breaking ground due to high interest rates, rising construction costs, and a market that needed time to catch its breath.
At the same time, population growth and job creation in Austin haven’t gone anywhere. The city is still expected to significantly grow over the next decade, and as supply tightens and demand catches back up, rent increases are likely to return—most likely in 2027.
Bottom line: renters currently have leverage, options, and flexibility. But the long-term trajectory of Austin hasn’t changed, and this “breather” in the rental market is part of a broader reset—not a permanent shift.
👉 If you’re renting and wondering whether it makes sense to renew, negotiate, or start planning a move toward buying while conditions are favorable, let’s talk. I’m happy to help you run the numbers and think through next steps.
National Real Estate Update
Housing Trends, Interest Rates, and Market Forecasts
Mortgage rates Close out 2025 at a 15-month low
Mortgage rates wrapped up 2025 with a bit of good news for buyers. The average 30-year fixed rate dipped to about 6.15%, the lowest level we’ve seen all year and noticeably better than where we were this time last year, when rates were pushing close to 7%.
Rates have been fairly steady since late November, hovering in the low-6% range, and while upcoming economic reports could cause some movement, most experts expect things to stay relatively calm in the near term. The 15-year fixed also edged down, landing in the mid-5% range—another small but meaningful improvement.
That said, lower rates don’t magically fix affordability overnight.
Even with this progress, many buyers are still feeling priced out. Monthly payments on a median-priced home remain high, and economists agree it will likely take a combination of sustained lower rates, slower price growth, and rising incomes to really move the needle. In other words, this is a step in the right direction—but not the finish line.
There is reason for cautious optimism heading into spring. Pending home sales have already started to respond to rate relief, even during what’s typically the slowest time of year. That could mean more momentum—and more competition—as we move into the spring market.
My take: if you’re waiting for “perfect” conditions, you may be waiting a long time. But if you’re informed, prepared, and realistic, this shift in rates can absolutely open doors—especially for buyers who plan ahead.
👉 If you’re wondering how today’s rates affect your buying power, monthly payment, or timing for 2026, let’s talk. I’m happy to help you run the numbers and build a smart plan—whether you’re ready now or just starting to think ahead.
📩 Send me a message anytime to get started.
Jennifer Carey
Realtor and Agent Success Manager at Open House Austin, real estate investor, and renovation enthusiast with Wimberley Airbnbs. She loves mid-century modern design, hiking Austin with her dog, yoga and pilates, and has been enjoying gardening at her new home in East Austin🎶✨
