Rising Rates and Housing impact in Austin

Team Members

• Ankita Sarkar
• Kim Sernett
• Justin Bernier

Overview

Our objective is to see if the Fed raising of rates is having an impact on real estate markets particularly the greater Austin, TX area. Many know Austin, and other major metropolitan real estate markets, have been hot and a sellers market the last few years. Real estate prices have been going up significantly in 2020 and 2021, mortgage originations and refinances have been high, and housing inventory in market low. Inflation in 2022 and other macroeconomic factors have contributed to the Fed raising interest rates, from historic lows to numbers we have not seen in well over a decade. Is this having an impact in real estate and what might the trend be in 2023?

Hypothesis - Fed rate increases are impacting the Austin real estate market by slowing it down.

Outcomes

1. Historical data and trends on Fed rates and mortgage rates
   • Fed Rate
   • 30 year Mortgage Rate
   • 15 year Mortgage Rate
2. Historical data and trends on real estate market metrics
   • Median price house sales
   • Sales - Above listing price/below sales price
   • Inventory
3. Impact of Fed rate hike on housing prices statistical support

PowerPoint Presentation

Link

Conclusion

We think the hypothesis that fed rate increases are impacting the Austin real estate market by slowing it down. Correlation between the fed rate, mortgage rates, median home price sales, inventory reflect a slowing housing market as rates continue to go up.

Datasources

• https://www.redfin.com/news/data-center/
• https://fred.stlouisfed.org/series/FEDFUNDS
• https://fred.stlouisfed.org/series/MORTGAGE30US
• https://fred.stlouisfed.org/series/MORTGAGE15US
• https://www.zillow.com/research/data/