Supply Is Tightening
New listings entering the market are running below last year's pace. Part of this week's gap is calendar-driven — Easter fell later in April last year — but the broader trend of supply restraint has been consistent across the first quarter. Builders are also pulling back on MLS additions, as they typically do in the first part of the year before ramping up inventory releases in the second half.
What that means for the market is straightforward: when supply growth slows while buyer demand holds steady or improves, the balance tips toward sellers in the well-priced segments. The percentage of active listings that have had at least one price drop keeps trending lower, which suggests sellers are coming to market with more realistic pricing from the start. That is a sign of a healthier market, not a distressed one.
Prices Are Lagging — and That Is Expected
Sold prices are showing year-over-year softness right now, and that will make headlines. It is important to understand why. Sold data reflects contracts written 30 to 45 days ago, and for new construction that window stretches even further. The buyers most active in this market right now are concentrated in the more affordable price segments — people who could not qualify before and are stepping in now. That activity naturally pulls the median and average sold price downward even as overall demand improves. Both things are true at the same time: demand is up, and sold prices are down. The sold price will catch up to where the leading indicators already are, but it takes time.
From the market peak, median prices remain meaningfully below their high, and a full return to peak values is a long-horizon story. Agents need to be prepared to explain this clearly to clients who are watching the headlines and getting confused.
The Market Is Approaching Recovery — Not There Yet
The Market Flow Score — a composite 0-to-10 index measuring overall market health — improved again in March, outperforming the same month last year. That is the second consecutive month of outperformance following a period of correction. The threshold for officially confirming a market recovery is four consecutive months of outperformance. We are halfway there. Two more months of the same and the market formally transitions from correction to recovery. What that means in practice: the demand side continues to build, more zip codes cross into expansion territory, and eventually the sold price data follows.
Some areas are already well past that threshold. Several zip codes and cities are operating in full expansion — activity indexes above 25% where multiple offers are routine. Others are still working through elevated inventory and will take considerably longer to turn. The macro story is improving, but the zip-code-level reality varies enormously. Hyper-local awareness is not optional right now.
The Rate Environment Demands Attention This Week
Inflation data released this morning showed service-sector input costs surging at the largest single jump in 14 years — the highest reading since late 2022. That is not good news for anyone hoping rates move lower in the near term. We have a heavy calendar of additional inflation data and Fed member commentary running through the end of the week.
The only responsible guidance for clients with rate decisions pending right now is lock-and-float — secure a rate lock while retaining the right to drop to a lower rate if conditions improve before closing. Going into Thursday and Friday unprotected is not a reasonable risk given what is on the economic calendar. Rates are currently sitting around six and a half percent on a conventional 30-year. Whether that number moves up or down by end of week depends on data that has not come out yet.
Looking further ahead, the incoming Fed Chair is expected to take over in May. The political expectation is for rate cuts. Based on his published work, a more likely focus is reducing the Fed's balance sheet — which would push rates up, not down. Plan client expectations accordingly.
Contract Changes Are Coming — Get Ready
Sixteen TXR form changes and three brand-new forms are expected to go mandatory in the May–June timeframe. The new forms include the Property Condition Statement, the Amendment to the Farm and Ranch Listing, and a Compensation Agreement Between Brokers on Farm and Ranch transactions. The Friday team meeting at the Austin Board of Realtors is the dedicated review session for all of it. This is not a meeting to skip.
