This week’s Monday Touch Point revealed that active listings across the Austin-area MLS have reached 17,294—just 43 listings shy of the all-time high. The New Listing to Pending Ratio opened at 0.50 for the past week and closed May at 0.57, marking the second-lowest May reading in 25 years. This widening gap between new listings and contracts indicates ongoing inventory pressure and weak buyer absorption. A record 96% of all weekly price changes were reductions, pushing the share of active listings with price drops to 52.2%. With Months of Inventory now at 6.18 and the Activity Index falling to 21.6%, the market continues shifting deeper into buyer territory, particularly in the resale segment.

Market Continues Correcting Amid Rising Inventory

The Austin housing market continues to correct as we move into June. For the week ending June 2, 2025, we’re starting with a New Listing to Pending Ratio of 0.50, indicating ongoing softness in buyer demand. For the month of May, the ratio finished at 0.57, the second-lowest May reading in 25 years. This leading indicator shows that for every two new listings, just over one goes under contract—a trend that continues to push inventory higher.

Price Cuts Hit Record Highs

A record-setting 96% of weekly price changes were reductions. Out of 2,039 price updates, 1,953 were price drops, while just 86 were increases. This is the most lopsided weekly adjustment ever recorded in the Austin MLS. For the entire month of May, there were 8,566 price drops and 626 price increases, meaning 93% of changes were downward—an aggressive market signal that sellers are chasing buyer engagement.

Inventory Reaches Historic Levels

Inventory continues to surge. For May, the six-county Austin region posted 15,058 active residential listings, a 14.3% increase year-over-year and a 7.3% gain over April. As of June 2, MLS-wide active inventory stands at 17,294, just 43 listings below the all-time high. Of those, 52.2% have undergone price reductions. These figures underscore a disconnect between asking prices and actual market absorption.

Pending Contracts Decline Again

Pending sales in May totaled 3,853, a 9.0% drop year-over-year and significantly below seasonal norms. Year-to-date, 18,932 homes have gone under contract, compared to 24,986 new listings—a gap of 6,054 units, one of the largest on record going back 25 years. This imbalance continues to accelerate the growth of active inventory.

Sold Properties & Price Trends

A total of 2,737 homes sold in May across the six-county region, marking a 15.1% decline year-over-year. When adjusted for population, that equals just 107.1 sales per 100,000 residents—the lowest May reading on record. Despite sluggish volume, average sold prices rose slightly to $597,846, up from $593,936 last May. However, median price declined 1.1% year-over-year, and the top 25th percentile saw greater pricing declines than the bottom 25th, signaling a shift in buyer focus to more affordable options.

Resale vs New Construction

The gap between resale and new construction performance is widening. The resale Activity Index dropped to 17.93%, squarely in buyers market territory, while new construction holds stronger at 31.86%. Builders are keeping MLS pricing firm but offering off-MLS incentives, contributing to pricing pressure on the resale market. This divergence is forcing resale sellers to compete with incentives they cannot match.

Local Trends & Forecast

Several resale-heavy areas are showing significant market strain. Zip code 78739 saw its Activity Index fall from 58% to 32%. In Del Valle, resale Months of Inventory sits at 10.6, compared to just 2.1 months for new construction. Areas such as Lockhart, Leander, and Manor are similarly showing growing signs of oversupply. Based on the latest percentile analysis, additional price softening is expected across a broad range of Austin-area zip codes.

Economic Outlook

Mortgage rates remain steady at 6.875%. Recent manufacturing and inflation data have come in better than expected, but all eyes are on the upcoming employment data release this Friday, which could impact bond yields and mortgage rates. Any significant shifts in employment numbers could push borrowing costs higher or provide brief rate relief.​

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Frequently Asked Questions – Austin Real Estate (June 2, 2025)

1. What is the current state of the Austin housing market?

As of June 2, 2025, the Austin market remains in a clear correction phase. Active listings have reached 17,294—just 43 shy of the all-time record. The New Listing to Pending Ratio is 0.50 for the past week and 0.57 for May, both well below the long-term average of 0.81. Buyer demand remains weak while inventory expands, pushing the market deeper into buyer territory.

2. How significant are price reductions right now?

Price reductions have hit an all-time high. In the past week, 96% of all price changes were drops—1,953 out of 2,039. For the full month of May, 93% of changes were reductions. This underscores seller urgency and a market where overpriced listings are failing to generate traction.

3. Are homes still selling in the Austin area, and at what price points?

Yes, but at a slower pace. In May 2025, 2,737 homes sold across the six-county Austin region—a 15.1% decline year-over-year and the lowest May sales rate per capita on record (107.1 per 100,000 residents). The average sold price was $597,846 (up slightly year-over-year), but the median declined 1.1%, with higher-end properties seeing the most pricing pressure.

4. How does new construction compare to resale right now?

New construction continues to outperform resale. The Activity Index for new construction is 31.86%, compared to just 17.93% for resale. Builders are offering off-MLS incentives to attract buyers, putting additional pressure on resale listings to lower prices or increase concessions.

5. What should buyers and sellers expect in the coming months?

Buyers can expect more options, ongoing price adjustments, and the potential for incentives—especially from builders. Sellers should prepare for longer days on market and stronger competition, particularly in price-sensitive zip codes. With a growing gap between listings and pendings, and price drops accelerating, pricing strategy and condition are critical in this environment.