OHA Market Update Series - Sep 25, 2025
National: Mortgage rates dipped before September’s Fed meeting as investors priced in a bigger cut, then rose again when the Fed delivered only 25 bps. We may see this same trend ahead of the November and December meetings—making now a smart time to get in before rates and prices shift.
Local: MUDs play a crucial role in Austin’s rapid growth by providing the infrastructure needed for new communities while keeping housing costs more affordable. For local buyers, understanding MUDs means making smarter decisions about taxes, neighborhoods, and long-term value.
Intrigued? Keep reading.
(4 minute read)
National Real Estate Update
Housing Trends, Interest Rates, and Market Forecasts
Why Mortgage Rates Moved the Way They Did—and What It Means for Buyers
If you’ve been watching the headlines (or your Zillow alerts), you probably noticed that mortgage interest rates dipped a few weeks before the September Fed meeting, only to creep back up right after. So, what happened?
In simple terms: the market was trying to predict the Fed’s next move. When weaker job reports came out, investors started pricing in a bigger rate cut—hoping for a 50 basis point drop. That optimism pushed mortgage rates lower. But when the Fed only delivered a 25 basis point cut, rates bounced back up.
This isn’t the first time we’ve seen this pattern, and it probably won’t be the last. Historically, rates often dip leading up to Fed meetings when the market bets on bigger cuts, then adjust afterward when reality sets in. Looking ahead, there’s a strong chance we’ll see this play out again in late October before the early November meeting (where another 25 basis point cut is expected) and again in December.
So, what does this mean if you’re thinking about buying a home? It could be an opportunity. If rates soften leading up to these meetings, you might be able to lock in something lower before the Fed’s official move—and before home prices start climbing again next year as more buyers re-enter the market.
OHA’s HOT TAKE:
👉 If you’ve been waiting on the sidelines, now is the time to start the conversation. Let’s talk about your goals and get you ready to take advantage of the market before competition heats back up.
Austin Area Real Estate & Community Update:
Market Trends, Local News, and Neighborhood Insights
Why MUDs Matter for Austin’s Growth and Housing Affordability
Austin is one of the fastest-growing cities in Texas—and in the entire country. With people moving here daily for jobs, culture, and lifestyle, our region has become a centerpiece of the “Texas Miracle.” But with that growth comes a big challenge: how do we make sure our infrastructure and housing supply keep up?
That’s where Municipal Utility Districts, or MUDs, come in. They may not be the most glamorous topic in real estate, but they’re a big reason why Austin is still able to offer new communities, new homes, and—most importantly—affordability.
What is a MUD?
A MUD is a special-purpose district created to provide utilities and infrastructure (like water, sewer, drainage, and roads) in areas where city services aren’t available.
Who runs it? A locally elected board made up of residents.
Who oversees it? The Texas Commission on Environmental Quality (TCEQ), which enforces rules for transparency, budgeting, and public accountability.
Who pays for it? Developers front the cost of building infrastructure. Homeowners within the district then repay those costs through property taxes specific to the MUD.
What a MUD Does for Austin
In Central Texas, many of our fastest-growing areas—like Leander, Pflugerville, Hutto, and parts of Bastrop and Kyle—sit outside Austin city limits. The city doesn’t always have the reach (or budget) to provide water, sewer, drainage, and roads in these areas.
MUDs step in to make that possible by:
Funding infrastructure upfront so new neighborhoods can be built without waiting on city expansion.
Supporting schools and counties with a predictable tax base.
Keeping costs off Austin taxpayers, since developers (not the city) take the initial risk.
In short: no MUDs, no new communities—and that means even more pressure on Austin’s already competitive housing market.
Why It Matters for Homebuyers
If you’ve shopped for a home in Austin, you know how quickly prices can climb when supply is tight. MUDs help keep things in balance:
Lower home prices in new builds: Infrastructure costs are spread over time, rather than rolled into the upfront sales price.
More supply: With MUDs, developers can build at the pace of demand, which helps keep resale prices from spiking.
Community investment: MUDs plan neighborhoods holistically—from parks to drainage to roads—rather than patching things together later.
For buyers, this means more options at more attainable price points.
Common Concerns in Austin
Austin residents often hear misconceptions about MUDs:
“MUD taxes will make my home too expensive.”
In reality, those taxes are offset by the fact that the home itself is usually priced lower up front. And many MUDs see their rates drop over time.“MUDs cause sprawl.”
Growth is already happening in Central Texas. MUDs don’t cause it—they help manage it responsibly by ensuring infrastructure is in place from day one.“MUDs aren’t accountable.”
Every MUD has an elected board of local residents, open meetings, audits, and oversight from the Texas Commission on Environmental Quality. In many ways, it’s more locally controlled than city government.
Why Austin Needs Them
If Austin wants to remain a place where young families, first-time buyers, and new residents can still afford to put down roots, we need tools like MUDs. They allow our region to grow while keeping homes within reach—not just for today’s buyers but for future generations.
The Bottom Line
MUDs aren’t just about utilities—they’re about protecting affordability and ensuring Austin’s growth is sustainable. As our city expands, they’ll continue to play a crucial role in shaping where and how we live.
OHA’S HOT TAKE:
Thinking about buying in the Austin area? I’d love to walk you through how MUDs work, what to look for on a tax bill, and how to compare neighborhoods fairly. Let’s find you a home that’s both a smart investment and a great place to live.
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 dogs, yoga and pilates, and has been enjoying gardening at her new home in East Austin🎶✨
