With a continually growing population, a strong economy, and cultural diversification, Austin, TX is fast becoming a destination for individuals looking to buy a house. But with the fast increase in the price of homes here, you may be contemplating whether it’s worth buying a house anytime soon.
Austin, TX’s booming employment rates, population growth, and variety of homes coupled with a healthy mortgage rate, has fueled the demand for housing in the Austin area. Home sales in Austin have increased by almost 84 percent, and the median price of homes rose from $193,520 to $318,000 between 2010-2019.
If you’re moving to Austin or planning to switch from renting a house to buying one, you may be confused about whether to buy or continue renting a home. The following sections cover a few reasons why now is an excellent time to buy a house in Austin.
With an estimated 61,586 people moving to the Austin area between mid-2018 to mid-2019, Austin is one of the fastest-growing metropolitan areas in the US. What this means for real estate is that the price of homes and rent are bound to experience a continuous increase.
Buying a house, especially investment or rental properties, is an excellent choice due to the influx of millennials, which makes up one-third of the Austin population looking to rent houses. With many of these young individuals and families vying for homes to buy or rent, you should consider purchasing a home soon to avoid stiff competition for housing availability.
One of the significant influences of any real estate market growth is the economy of the area. According to a report by POLICOM, Austin has the fastest-growing economy for metropolitan areas in the US. Unemployment rates are at an all-time low at 2.7%, which is far lower than the state average of 4.0% and the national average of 3.9%.
Also, with a 3.5% growth in jobs over the last year, Austin is now a tech and economic center for individuals and businesses around the US. This, in turn, influences the price of a home and the price of rent.
Most importantly, with Apple building a tech campus in Austin estimated to bring in about 15,000 employees, there is bound to be a massive switch to a seller market and thriving rental market. Buying a house now can help you avoid the future rush for homes and take advantage of the influx of young renters.
Home Valuation and Appreciation
If you’re looking to buy a home in an area with room for home appreciation, then you should consider the Austin area. Housing rates in Austin are quite affordable when compared to metropolitan areas with a similar demography. In Austin, the price of homes averages around $401,999, which is lower than in metro areas like San Diego and Los Angeles.
However, with an increased population, bustling economy, and growing demand for homes, home values have appreciated up to 74.80% over the last ten years. Between 2019 and 2020, houses in the Austin area experienced a 7.01% appreciation rate making it one of the top ten regions with the highest rate in the US.
More importantly, the median price of homes over the last year is $318,000, up 2.3% over the 2018 median price. Buying a home in Austin now allows you to build enough equity and likely sell for a higher return.
Rising Mortgage Rates
While mortgage interest rates are at a historically low in Austin, the chances of it staying down are low. Current mortgage interest rates for a 30-year fixed-rate mortgage are at 4.2% and 3.6% for a 15-year fixed in Austin. But experts at Realtors predict that mortgage rates in Austin may increase as high as 6.0% by the end of 2020.
An increase in mortgage rates may lead to home affordability issues since current homeowners may be unwilling to sell their homes due to the increased rates. Also, you may have to deal with a higher mortgage payment due to the increase in the rates. Buying a home soon may be your best bet in getting a home in Austin for a low mortgage rate while it’s still low.
Quality of Life
Austin is regarded as one of the best places to live in the US according to a report by US News & World report. With Austin being home to some of the top entertainment and sports centers, shopping malls, schools, and outdoor arenas, if you are looking to buy a home in Austin, now may be the best time to take advantage of the amenities it has to offer.
The Austin, TX area poses a lot of potential benefits not just to homeowners but home buyers. However, you should evaluate the pros and cons of buying a home in Austin before you make your decision. Speak with a local lender to find out if you qualify for a mortgage and get pre-approved before looking for homes in Austin.