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A daily look at the most significant and interesting stories affecting Austin. Written by Nicole Cobler and Asher Price.

Axios Austin

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Axios Austin Thought Bubble

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Credit: Data: Zillow; Note: Origins include the entire metro area; Chart: Axios Visuals

The majority of people searching Austin-area Zillow postings from outside of Austin are from Dallas, Houston and San Antonio. 

Driving the news: Roughly 59% of page views from out of town for Austin-area Zillow listings are from within Texas, according to first-quarter Zillow data shared with Axios. 

Dallas folks are doing the most searching, at 23.9%, followed by Houstonians at 22.9% and San Antonians at 12.2%. 

Of the top 10 metros from which searches originate, 41% were from out of state — with the top location Los Angeles at 11.2%, followed by New York and San Francisco. 

Catch up fast: Average home prices in greater Austin fell more than 10% between July 2022 — when the market peaked — and April 2023. 

It was the biggest percentage drop in the country, coming after a pandemic-era market boom that analysts called the most overpriced it had been in at least three decades. 

The big picture: Since 2021, there's been an exodus from high-cost tech hubs along the West Coast — including the Bay Area and Seattle — for more affordable mountain region states and Texas, says Redfin deputy chief economist Taylor Marr. 

Indeed, Austin was a top destination for fleeing remote workers during the pandemic. 

Yes, but: "We're seeing a big pullback in migration right now," Marr tells Axios.

Currently, it's simply too expensive for many people to buy. Across the U.S., the number of Redfin users searching for homes within their metro is down 18% from a year ago, per a June report.

Meanwhile, the number of users surfing listings in a new area dropped 7%.

Between the lines: If people are moving right now, it's in search of cheaper housing.

What's next: Growing environmental concerns will start to influence migration patterns, though affordability will likely still be the No. 1 driver, Marr predicts.

Other Texans are searching for Austin homes on Zillow

The majority of people searching Austin-area postings from outside of Austin are from Dallas.

Real estate

The majority of people searching Austin-area Zillow postings from outside of Austin are from Dallas, Houston and San Antonio. Driving the news: Roughly 59% of page views from out of town for Austin-area Zillow listings are from within Texas, according to first-quarter Zillow data shared with Axios.

Real Estate

Data: First Street Foundation; Map: Kavya Beheraj/Axios

Nearly 88% of properties in the Austin metro area could be facing higher insurance premiums or policy non-renewals due to the risk of wildfires, high winds, and flooding, Axios' Brianna Crane and Kavya Beheraj report, based on a new analysis.

Driving the news: Insurers are changing how they factor climate and extreme weather risks into premiums, and Texas is among the states with the steepest increases in homeowners insurance premiums since last year.

The big picture: Millions of properties nationwide could see higher premiums because of these climate- and weather-related risks, per estimates from the First Street Foundation, a climate data nonprofit.

Nearly 24 million U.S. properties may face higher premiums because of the risk of potential wind damage, about 12 million because of the risk of flooding, and about 4.4 million due to wildfire risk.

Zoom in: The Austin area has seen its share of costly weather events just this summer, including this week's baseball-sized hail that damaged roofs, shattered windows and dented cars.

Though too much rain hasn't been a problem lately, Central Texas is known as flash flood alley.

Roughly 87% of Austin area properties are at risk of an insurance rate increase because of wind-related risks and 5.4% because of flood-related risks, according to First Street Foundation.

Yes, but: Despite our area's rising risk of wildfires, premiums for homes in Central Texas are unlikely to see a rise in home insurance premiums due to wildfire risk, according to First Street Foundation's analysis.

What's happening: When it comes to wildfire and wind damage, some private insurers are dropping policyholders as the risk of those threats grows, says Jeremy Porter, First Street's head of climate implications research.

That's leading many homeowners to opt for public "insurer of last resort" plans — but often at higher rates.

Between the lines: Climate and extreme weather risks — and the associated financial costs — are slowly starting to influence where people choose to live, Porter says.

higher insurance premiums or policy non-renewals

Austin's home insurance premiums could rise

Insurers are changing how they factor extreme weather risks.

Nearly 88% of properties in the Austin metro area could be facing <a class="gtmContentClick" data-vars-link-text="higher insurance premiums or policy non-renewals" data-vars-click-url="https://www.axios.com/2023/09/27/insurance-rates-climate-change-extreme-weather" data-vars-content-id="a25a6f26-5cfd-4299-a639-9e98be5257fc" data-vars-headline="Austin&#x27;s home insurance premiums could rise" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/09/27/insurance-rates-climate-change-extreme-weather" target="_self">higher insurance premiums or policy non-renewals</a> due to the risk of wildfires, high winds, and flooding, Axios&#x27; Brianna Crane and Kavya Beheraj report, based on a new analysis.Driving the news: Insurers are changing how they factor climate and extreme weather risks into premiums, and <a class="gtmContentClick" data-vars-link-text="Texas is among the states" data-vars-click-url="https://www.axios.com/local/dallas/2023/08/03/texas-homeowners-insurance-premiums-rising" data-vars-content-id="a25a6f26-5cfd-4299-a639-9e98be5257fc" data-vars-headline="Austin&#x27;s home insurance premiums could rise" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/dallas/2023/08/03/texas-homeowners-insurance-premiums-rising" target="_self">Texas is among the states</a> with the steepest increases in homeowners insurance premiums since last year.

News

Climate

The Austin area's housing market continued to cool in January, even as prices nationally slightly increased.

Why it matters: Any relief from sky-high home prices is welcome, especially as mortgage rates creep up, writes Axios' Brianna Crane.

By the numbers: The median home sales price in the Austin metro area was $451,000 in January, down 6.6% from last January and down nearly 0.9% from December, per recent data from Redfin.

Homes sat on the market for 80 days on average in January, compared to 45 days last year.

What they're saying: Monthly housing inventory stayed flat at 2.7 months of inventory from December 2022, according to the Austin Board of Realtors, a strong indicator that the Austin market is still in need of more housing.

"January’s data demonstrates the Austin-Round Rock MSA market is continuing to find a post-pandemic normal," Austin Board of Realtors president Ashley Jackson said in a statement.

Of note: "Outlying areas like Caldwell and Hays counties are the most affordable pockets in Central Texas," Jackson added. "When we have a city like Austin challenged by affordability, the entry point in surrounding areas will slightly increase as people try and find neighborhoods they can afford."

Zoom out: Nationally, median home sales prices have crept up 1.3% from one year ago.

The national median home sales price in January was $383,000.

Sales fell for the 12th month in a row, according to the latest from the National Association of Realtors

As demand falls, homes sit on the market a little longer, which gives buyers a little more room to negotiate.

What's next: Spring, typically marked by high demand, more competition and higher home prices, is right around the corner.

If spring 2023 follows typical trends, we should expect home prices to rise again in the near future.

Yes, but: Experts predict 2023 will see a far less frantic housing market than in 2022.

Median home sale prices drop in Austin

The median price was 6.6% lower than a year earlier.

The Austin area&#x27;s housing market continued to cool in January, even as prices nationally slightly increased.Why it matters: Any relief from sky-high home prices is welcome, especially as <a class="gtmContentClick" data-vars-link-text="mortgage rates creep up" data-vars-click-url="https://www.freddiemac.com/pmms" data-vars-content-id="c3a2d50b-30e6-4143-b038-6ea50d6d09b3" data-vars-headline="Median home sale prices drop in Austin" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.freddiemac.com/pmms" target="_blank">mortgage rates creep up</a>, writes Axios&#x27; Brianna Crane.

Data: Dwellsy; Chart: Axios Visuals/Axios

With a median rent for new listings of $2,930, Austin is still one of the most expensive cities for renters, per the latest from rental company Dwellsy.

Why it matters: Already-expensive rents have climbed in 2022, making it harder for people to afford housing close in.

By the numbers: Among the thousands of Austin-area listings posted through Dwellsy, asking price for rent increased 86.3% (!) from August 2021 to August 2022, the report showed, making Austin the fifth-most expensive metro area in the country.

And it ranked No. 5 in the list of Dwellsy cities where rents grew the fastest.

Driving the news: Demand for rental single-family homes is driving the market, per Dwellsy. Rent prices for those homes are up more than 36% year over year, while apartment rent has risen only 4.7%.

Yes, but: Rents could finally be peaking. Realtor.com's latest report shows August median rental prices nationwide were down from July — the first decrease since November 2021, Axios' Emily Peck writes.

The big picture: Many would-be buyers are stuck renting as surging mortgage rates make buying a nonstarter.

High demand and critically low supply drives rents up.

Once landlords realize they can charge more for a unit, "they're going to keep increasing the price to capture as much profit as they can," Redfin chief economist Daryl Fairweather told Peck in an earlier story.

🏆 Pro tip: Check out our one-minute guide to negotiating better rent. 

Editor's note: This story was corrected to clarify that the median rent data was based on active listings from Dwellsy, not all rental units.

Austin is one of the worst cities for renters

The average rent increased 86.3% (!) from August 2021 to August 2022.

With a median rent for new listings of $2,930, Austin is still one of the most expensive cities for renters, per <a class="gtmContentClick" data-vars-link-text="the latest" data-vars-click-url="https://dwellsy.com/blog/rent-price-data/" data-vars-content-id="d8ee08a9-c889-4587-bfeb-4e7c894661ff" data-vars-headline="Austin is one of the worst cities for renters" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://dwellsy.com/blog/rent-price-data/" target="_blank">the latest</a> from rental company Dwellsy.Why it matters: Already-expensive rents have climbed in 2022, making it harder for people to afford housing close in.

Mortgage rates surpassed 5% — their highest in more than a decade, according to data shared by Freddie Mac. 

Why it matters: Low mortgage rates made buying in a sellers' market more affordable in the pandemic. 

This March, median home sale values in Austin were up 23% year over year, and now borrowing money is more expensive, too. 

Already fatigued buyers could be priced out of the market. 

Data: Freddie Mac, Redfin; Chart: Simran Parwani/Axios

State of play: A year ago, mortgage rates were at 2.97%. In late April, they sat at 5.11%.

If you took out a $300,000, 30-year mortgage loan in April 2021, your monthly principal and interest would be around $1,260, according to numbers shared by Freddie Mac. 

Your monthly payment on a $300,000, 30-year loan this April (at 5.11%) would be $1,631. 

That's $371 more per month; $4,452 a year; and $133,560 more over the life of your loan.

What's next: Mortgage rates are expected to rise throughout the year, averaging 4.6% for 2022 and 5% for 2023, according to Freddie Mac's trend forecast. 

If demand cools because of rising rates, housing prices could stabilize. 

We're still in a supply crunch, so inventory would have to catch up to the remaining demand for prices to actually cool.

Surging mortgage rates make homebuying more expensive for Austin

This March, median home sale values in Austin were up 23% year over year, and now borrowing money is more expensive, too.

Illustration of a house's roof being taken off by a trend line soaring upward through the home

Texas

Mortgage rates surpassed 5% — their highest in more than a decade, according to data shared by Freddie Mac. Why it matters: Low mortgage rates made buying in a sellers&#x27; market more affordable in the pandemic.

Brianna Crane

Featured stories

Austin's home insurance premiums could rise

Other Texans are searching for Austin homes on Zillow

Median home sale prices drop in Austin

Austin is one of the worst cities for renters

Surging mortgage rates make homebuying more expensive for Austin