How Interest Rates Are Shaping Home Prices in Central Texas Right Now

Are Interest Rates Driving Home Prices in Central Texas?

If you’ve been watching the real estate market this year, you might be wondering: How are interest rates shaping home prices in Central Texas right now? It’s a common question I hear every week, especially from buyers trying to time their first purchase—and sellers wondering if now’s still a good time to list.

Let’s get straight to it: interest rates are impacting both pricing and buyer behavior, but not always in the way you’d expect.

According to Freddie Mac, as of July 2025, 30-year mortgage rates are hovering around 6.75%, up slightly from last year but far more stable than the rollercoaster ride of 2022 and 2023. This stability has helped ease buyer hesitations and increased mortgage applications by over 13% compared to the same period in the previous year.

So what does that mean for the Austin, Texas real estate market—and for buyers and sellers across Buda, Kyle, Round Rock, Georgetown, and beyond? Let’s break it down.

Home Prices Are Finally Steadying in Central Texas

In high-demand areas like Austin, Buda (78610), and Leander (78641), we’re seeing price moderation rather than dramatic drops. Inventory is up about 20% year over year in Central Texas, which is giving buyers more room to breathe—and more room to negotiate.

Many sellers are no longer pricing aggressively high. They’re pricing strategically. If you’re selling a home in Austin, Texas, it’s still possible—but presentation and pricing strategy matter more than ever.

Buyers Are Getting Creative With Financing

With higher rates, buyers are taking advantage of:

• Seller concessions and rate buydowns (especially in new construction)
• Adjustable-rate mortgage options
• Homebuilder incentives on move-in ready homes in communities like Sunfield, Easton Park, and Flora

Builders and sellers alike are offering creative solutions to keep deals moving forward.

Why Are Rates Affecting Different Areas in Different Ways?

In areas like Pflugerville (78660) and Bastrop (78602), increased inventory has created more pricing flexibility. But in tighter submarkets like Dripping Springs or West Austin, demand still outpaces supply—keeping prices firm.

Brandon Holley, an Austin, Texas, Realtor and founder of Holley Homes Realty, says: “We’re in a more balanced market right now. That’s giving serious buyers a chance to negotiate—and helping sellers who are realistic still walk away with great results.”

Where Can I Find Affordable Homes Near Austin?

Buyers looking for affordability should explore neighborhoods in:

• ​Buda (78610)​
• ​Kyle (78640)​
• ​Manor (78653)​
• ​San Marcos (78666)​
• ​Hutto (78634)​
• ​Bastrop (78602)​

These communities offer more new construction options, sometimes with builder-paid closing costs and lower interest rates thanks to partnerships with preferred lenders. Check out our New Construction Guide for more.

How Will This Market Impact My Home’s Value?

Whether you're thinking about buying a home in Central Texas or selling a home in Austin, Texas, the biggest shift today is predictability. Rates may not be low—but they’re not volatile. And with strong job growth, continued migration to Texas, and increasing inventory, we’re entering a healthier long-term market.

Ready to Make a Move? Let’s Talk.

Every market has its opportunities—and this one is no exception. Whether you’re buying your first home or planning to sell, you need a strategic partner who knows the nuances of each Central Texas zip code.

Call or text Brandon Holley at 512.487.9242

Email Brandon Holley at brandon@holleyhomesrealty.com

Watch our latest market updates at Your Austin Home Guide | Holley Homes Realty​

Schedule a meeting at Book Here​

Download our Buyer Guide​

Explore new builds with our New Construction Guide​