I try not to announce that the sky is falling or this is the best time to do X every month, week or day because it just loses relevance if you are always talking about the sky falling. Go look on YouTube for housing crash in 2020, 2021, 2022, 2023, 2024, and 2025. You will find a ton of videos for every year. Some would argue that 2024 or 2025 was a crash because prices dropped to pre-covid levels. When the roller coaster was going up in those years, did anyone think it wouldn't come back down? Well here we are. Now it's a matter of when will it go back up like it always does? Is there more room or are we at a bottom?
In this article I am going to present why we might be at a local bottom, at least for the Austin market. I get things wrong, but I am close to the industry and when something changes I like to write about it. So instead of sending an email newsletter when nothing new or interesting has happened, I wait until I feel like there is something worth writing about. So, a couple of things..
Jobs numbers mean lower rates
The jobs numbers came out last week at just 22,000 jobs added which is really low. Combine that with the drama about how those numbers are produced and faith in the jobs market is faltering. When jobs numbers are bad, then 10 year treasury tends to fall which tends to impact the 30 year mortgage rate. Just this week I am seeing my lender partners tell me that they can do 30 year loans at 6.0% or very close to it. We haven't seen rates like that since a brief window in September of 2024, and before that Feb of 2023. It could be a bounce for sure, we will have to wait and see.
Political pressure at the FED
Stephan Miran is Trump's pick for the Fed board and would place a White House employee in that seat. While there are multiple board seats, this is shaking faith in the institution as an independent body. There are many reasons to lower rates and doing so would help Trump and the national debt by being able to roll over existing loans into lower interest rate loans which would make it easier on the US to borrow and pay for said debt. That certainly risks being inflationary, but these political winds are definitely blowing in the low rate direction. The market today (Sept 9, 2025) expects the Fed to lower rates at their next meeting on the 17th. That being said, the Fed rate isn't nearly as impactful on 30 year mortgages as the jobs numbers.
Seasonality
Real estate is always seasonal. It rises in the spring, peaks late spring or early summer and falls to its lowest point sometime between October and November. The curve is always a little different but that cycle is always there. It being September we are approaching that bottom.
A golden ratio to watch
Every week I write a report for all of my listing clients and one of the things we watch closely is the ratio of contracts to price changes. This is very neighborhood specific, but many areas will have around 6 price adjustments and 1 property go under contract. So this is a 6:1 falling market. In 2021 this would be the reverse, 6 contracts and no price adjustments. If more listings are dropping their price than going under contract then I tell my clients, look even though we are at price X, the market just lowered that price. This summer that ratio was easily 8-12:1. Now it is more like 2-4:1. So we are approaching 1:1 which will be the bottom of the curve and when things tend to go the other way. Combined with the lower rates we are seeing, as well as entering the spring we may see more inventory absorption and even increasing prices.
As always, question everything and don't take suggestions as absolutes. These are written from a perspective of our experience and offering our insight, however limited. We're not perfect and get things wrong... but not on purpose.
