Understanding the Freddie Mac House Price Index (FMHPI®)
The Freddie Mac House Price Index (FMHPI®) is a powerful tool that tracks how home prices evolve across the United States, offering a clear snapshot of housing market shifts. Think of it as a compass for navigating real estate, revealing whether prices in places like Austin or beyond are rising, falling, or holding steady. Unlike simple averages of home sale prices—which can skew based on what’s selling, like luxury homes or fixer-uppers—the FMHPI® zeroes in on price changes for the same properties over time, delivering a more reliable picture of market trends. Updated monthly and released with fresh data (like the March 2025 report below), it’s a go-to resource for spotting patterns, comparing cities, and making smart moves—whether you’re a buyer, seller, real estate pro, or policymaker. Beyond individual decisions, it doubles as an economic pulse check, reflecting how housing ties into the broader economy. Dive into the latest insights in our updated article, and grab the full FMHPI® report as a PDF below for an even deeper look.
Austin Housing Market Trends: Freddie Mac House Price Index (FMHPI®) – Updated March 2025
The Freddie Mac House Price Index (FMHPI®) remains a vital tool for understanding housing market trends across the U.S., delivering detailed insights into price shifts in major metropolitan areas. As of March 1, 2025, the latest data for Austin reveals a continued market correction, positioning it distinctly among Texas and national markets. This analysis explores Austin’s housing market performance, key drivers, and what lies ahead for buyers and sellers in 2025.
Austin’s Housing Market: A Post-Pandemic Rollercoaster : Austin’s housing market soared during the pandemic, with home prices in the Austin-Round Rock-Georgetown area climbing 38.5% from January 2020 to their peak in May 2022. However, shifting economic conditions—including rising interest rates and affordability pressures—triggered a significant correction. By March 2025, Austin’s home prices have dropped 16.8% from their peak, one of the steepest declines nationwide, far exceeding the national average drop of 1.9%.
As of March 2025, Austin’s year-over-year (YoY) price change is -6.7%, signaling ongoing softness. This contrasts sharply with the national YoY average increase of 10.5%. Within Texas, Austin’s decline outpaces other major metros: Houston is up 15.1% YoY, San Antonio is down 15.9% from its June 2022 peak, and Dallas shows a modest 14.8% YoY gain. Austin’s month-over-month (MoM) change of -3.4% further underscores its cooling trend, compared to the national MoM average of 3.49%.
How Austin Stacks Up Nationally : Austin’s correction is notable but not unique. Among major U.S. markets:
San Francisco: Down 5.1% from its May 2022 peak.
Portland: Down 3.4% from May 2022.
Denver: Down 3.3% from May 2022.
Sacramento: Down 4.0% from May 2022.
Phoenix: Down 2.0% from May 2022.
Austin’s -16.8% drop ranks it among the hardest-hit markets, alongside metros like Punta Gorda, FL (-11.6%) and Cape Coral-Fort Myers, FL (-10.0%). However, cities like Charlotte (+20.9% from Jan 2022) and Miami (+17.1% from Jan 2022) continue to show resilience, highlighting regional disparities.
Why Austin’s Market Is Shifting : Several factors explain Austin’s volatility:
Pandemic Boom: Rapid tech-sector growth and population influx drove unprecedented demand, pushing prices to unsustainable levels.
Affordability Crunch: Even after the correction, Austin remains one of Texas’s least affordable markets, sidelining many buyers.
Rising Mortgage Rates: Higher rates have reduced purchasing power, cooling demand since 2022.
Market Rebalancing: Increased inventory and cautious buyer sentiment have softened prices further.
Despite these challenges, Austin’s fundamentals remain strong. The city’s robust job market, fueled by tech and business expansion, supports long-term optimism.
Signs of Stabilization : While Austin’s home prices are down significantly, the pace of decline is slowing. The -3.4% MoM drop in March 2025 is less severe than earlier corrections, suggesting the market may be nearing a bottom. Buyer interest is ticking up as inventory stabilizes, mortgage rate expectations adjust, and sellers adopt more realistic pricing. This could signal a move toward equilibrium in the coming months.
What’s Next for Austin in 2025? Looking ahead, several factors will shape Austin’s housing market:
Mortgage Rates: A potential decline could lure buyers back, boosting demand.
Job and Population Growth: Austin’s status as a tech hub ensures continued inflows, supporting housing needs.
Inventory Levels: A balanced supply-demand dynamic could halt price drops and foster stabilization.
For buyers, this correction offers a rare window in a historically competitive market. Lower prices and improving conditions may align with shifting rates, creating opportunities in 2025.
For sellers, success hinges on competitive pricing. Buyers are discerning, and aligning with current trends is critical.
Key Takeaways for Austin Real Estate in 2025 : Austin’s housing market has undergone a dramatic correction, with a 16.8% drop from its May 2022 peak and a -6.7% YoY decline as of March 2025. While challenges persist, signs of stabilization and Austin’s economic strengths suggest a potential recovery. Whether you’re buying or selling, staying informed with FMHPI® data and market trends will be key to navigating this evolving landscape
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