Austin Real Estate Market Update – May 16, 2025
Inventory Hits New Record as Market Correction Deepens
Austin’s housing market update for May 16, 2025, confirms an accelerating shift toward oversupply, with inventory setting a new all-time high. The MLS now reports 16,946 active residential listings, exceeding yesterday’s record and reflecting a surge in new supply. Inside the city limits, Austin holds 5,385 active listings, up sharply from a year ago. Year-to-date, new listings are running 22.1% above the historical average, further reinforcing the upward pressure on inventory.
Buyer demand, however, remains weak. Pending listings have declined to 4,941, a 1.9% year-over-year drop, while the New Listing to Pending Ratio has deteriorated to 0.48. This means more than two listings are entering the market for every one that goes under contract. The Activity Index, a key indicator of buyer engagement, has fallen to 22.6%, down from 26.5% a year ago. Pending volume is 5.8% below seasonal norms, signaling continued hesitation among prospective buyers.
This widening gap between supply and demand is clearly reflected in inventory absorption metrics. Months of Inventory (MOI) has risen to 6.03, up from 4.91 in May 2024—a 22.8% year-over-year increase. In the City of Austin, MOI now stands at 6.10, placing the majority of neighborhoods in neutral or soft buyer’s market territory. Outlying areas such as Marble Falls, Dale, and Spicewood are experiencing extreme inventory pressure, each reporting MOI levels of 11.00, suggesting substantial buyer retreat in those markets.
Home prices continue to adjust under the weight of rising supply. The median sold price for May 2025 is $465,000, down $60,000 or 11.4% from the May 2022 peak of $525,000. The average sold price now stands at $612,733, a decline of $59,206 or 8.8% from its peak of $671,939. These figures confirm a sustained market correction, especially in mid-to-upper price segments where affordability challenges are most acute.
Although select properties in high-demand areas still receive competitive offers, the broader market is characterized by longer days on market, frequent price drops, and buyers exercising greater caution. Per capita sales remain below trend, reinforcing a landscape where well-prepared buyers are in a stronger position to negotiate and wait for value.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for May 16, 2025.
Austin Real Estate Market – Frequently Asked Questions
What is the current state of the Austin housing market in May 2025?
As of May 16, 2025, the Austin housing market is characterized by record-breaking inventory growth and sustained weakness in buyer demand. There are now 16,946 active residential listings across the MLS, marking the highest level ever recorded in the region. In contrast, pending contracts have fallen to 4,941, a 1.9% year-over-year decline, signaling ongoing buyer hesitation.
The New Listing to Pending Ratio has declined to 0.48, indicating that new listings are entering the market at more than twice the rate of homes going under contract. The Activity Index, which measures buyer engagement relative to total listings, has dropped to 22.6%, down from 26.5% in May 2024. These figures collectively reveal a market increasingly tilted in favor of buyers, where elevated supply and cautious demand are placing downward pressure on pricing and extending time on market.
How much housing inventory is available in the City of Austin right now?
The City of Austin currently has 5,385 active listings, a substantial year-over-year increase that reflects broader regional oversupply. The Months of Inventory (MOI) for Austin has climbed to 6.10, up from 4.36 in May 2024—a 40.1% increase. This level of inventory places the city squarely in neutral-to-buyer market territory. In surrounding areas, market conditions are even more lopsided. Communities like Marble Falls, Dale, and Spicewood each report an MOI of 11.00, indicating extreme inventory saturation and diminished buyer activity. These elevated MOI levels across both urban and rural submarkets underscore a sustained imbalance between listings and absorption.
What does a New Listing to Pending Ratio of 0.48 mean for buyers and sellers?
A New Listing to Pending Ratio of 0.48 means that for every home placed on the market, fewer than one is going under contract. This signals a growing disparity between supply and demand, placing pressure on sellers to stand out in a crowded field. Sellers should be prepared for longer listing durations, potential price reductions, and the need for compelling pricing and marketing strategies. For buyers, this ratio reflects a favorable environment—offering increased selection, more negotiating leverage, and reduced urgency to act quickly. Historically, a ratio this low in May is rare and serves as a warning sign of broader market softening.
Is buyer activity increasing or decreasing in the Austin real estate market?
Buyer activity is decreasing. The Activity Index has declined to 22.6%, down from 26.5% in May 2024, representing a 14.9% drop in engagement year-over-year. In addition, pending sales are 5.8% below the historical average for this time of year, confirming a continued slowdown in buyer momentum. Affordability constraints, higher listing volume, and wait-and-see sentiment among consumers are all contributing to reduced buyer participation. This downturn in engagement is resulting in slower transaction velocity, extended days on market, and increasing opportunities for buyers across many price points and locations.
How are Austin home prices trending in May 2025?
Austin home prices remain in a sustained correction phase. The median sold price for May 2025 is $465,000, down $60,000 or 11.4% from the May 2022 peak of $525,000. The average sold price is $612,733, which reflects a decline of $59,206 or 8.8% from its peak of $671,939. These reductions highlight the long-term impact of elevated supply and subdued demand, even though some individual months may show small gains. While well-located homes priced competitively still attract interest, the broader trend continues downward. The three-year trajectory makes clear that the market remains in a prolonged adjustment cycle, particularly affecting mid- and upper-tier price segments.
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