Money matters

10 affordable Austin-area neighborhoods for first-time homebuyers

Round Rock offers access to the highly rated school district and other amenities.

Photo by Riser Aerial

For many first-time homebuyers, one enormous obstacle stands in the way of purchasing a house: affordability. In a recent survey by LendingTree, 61 percent of first-time homebuyers in the U.S. cited the struggle to find affordable homes as their No. 1 source of stress.

So, if you’re among those 61 percent, know that you’re not alone.

To help you overcome the affordability hurdle, we’ve done some homework for you. We assembled 10 neighborhoods in the Austin metro area where you reasonably can expect to pay less than $300,000 for a single-family home (including a few that are actually within the city of Austin). That price point sits below the March 2019 median home prices of $305,000 for the Austin-Round Rock metro area, $355,000 in Travis County, and $375,000 within Austin’s city limits, according to the Austin Board of Realtors.

Using the ABOR's home-price data, which covers the average sale price by ZIP code through the first three months of 2019, we analyzed the best places for first-time (or anytime) homebuyers. While this data includes new and existing single-family homes, it does not include condos or townhomes, and it's worth nothing that the average sale prices in two of the ZIP codes we chose are slightly above our $300,000 threshold.

Buda
Average home price: $280,431
Highlights: Easy access to Cabela’s, Buda Sportsplex, and at least six parks. Close proximity to Jacob’s Well, Salt Lick BBQ, and wineries. About 15 miles southwest of downtown Austin and 18 miles northeast of San Marcos.
Main roadways: I-35, State Highway 45, FM 1626, FM 967, South Loop 4
ZIP code: 78610 (includes Buda, Creedmoor, and Mustang Ridge)

Far East Austin/Manor
Average home price: $230,049
Highlights: Location of $2 billion, 2,062-acre Whisper Valley master-planned community. Close proximity to Walter E. Long Metropolitan Park and Travis County Expo Center. About 16 miles northeast of downtown Austin.
Main roadways: State Highway 130, U.S. Highway 290, Blake Manor Road, Webberville Road
ZIP code: 78653

Hutto
Average home price: $247,014
Highlights: Easy access to Golf Club at Star Ranch and Texan Cafe & Pie Shop. About 30 miles northeast of downtown Austin.
Main roadways: State Highway 130, Chandler Road, FM 1660, Limmer Loop
ZIP code: 78634

McKinney Falls
Average home price: $250,703
Highlights: Easy access to McKinney Falls State Park and Onion Creek Greenbelt. Close proximity to Southpark Meadows and Austin-Bergstrom International Airport. About seven miles southeast of downtown Austin.
Main roadways: I-35, U.S. Highway 183, State Highway 71, Stassney Lane, William Cannon Drive
ZIP code: 78744

North Lamar - Walnut Creek
Average home price: $264,120
Highlights: Easy access to Walnut Creek Metropolitan Park, Walnut Creek Greenbelt, Tech Ridge shopping center, and Dell’s South Parmer campus. Close proximity to the University of Texas' Pickle Research Campus and the Domain. About 12 miles northeast of downtown Austin.
Main roadways: I-35, U.S. Highway 183, North Lamar Boulevard, Dessau Road, Braker Lane, Parmer Lane, Runderberg Lane, Yager Lane, Wells Branch Parkway
ZIP code: 78753

Pflugerville
Average home price: $280,834
Main roadways: I-35,State Highway 130, Wells Branch Parkway, Howard Lane, Gattis School Road, Heatherwilde Boulevard, Pecan Street
Highlights: Easy access to Lake Pflugerville Park and Austin Executive Airport. About 19 miles northeast of downtown Austin.
ZIP code: 78660

Round Rock - Dell
Average home price: $271,037
Highlights: Easy access to main Dell campus. Close proximity to Dell Diamond. Access to highly rated Round Rock Independent School District. Roughly 20 miles northeast of downtown Austin.
Main roadways: I-35, State Highway 45, U.S. Highway 79, Gattis School Road, Old Settlers Boulevard
ZIP code: 78664

Round Rock - IKEA
Average home price: $300,766
Highlights: Easy access to Texas State University-Round Rock, IKEA, Round Rock Premium Outlets, and Bass Pro Shops. Access to highly rated Round Rock Independent School District. Roughly 25 miles northeast of downtown Austin.
Main roadways: I-35, U.S. Highway 79, University Boulevard, A.W. Grimes Boulevard, Old Settlers Boulevard
ZIP code: 78665

Southeast Austin - Onion Creek
Average home price: $289,369
Highlights: Close proximity to Southpark Meadows, Onion Creek Greenbelt, Circuit of The Americas, and Austin-Bergstrom International Airport. Roughly 15 miles southeast of downtown Austin.
Main roadways: I-35, State Highway 130, State Highway 45, U.S. Highway 183, Old Lockhart Road, FM 1327, FM 1625
ZIP code: 78747

Wells Branch
Average home price: $300,263
Highlights: Easy access to La Frontera. Close proximity to the Domain. About 17 miles northeast of downtown Austin.
Main roadways: I-35, MoPac Expressway, State Highway 45, Wells Branch Parkway, FM 1325, Howard Lane, McNeil Road, Shoreline Drive
ZIP code: 78728

home-for-sale

real estate report

How Austin fits into Zillow's predicted housing market growth in 2025

Photo by Justin Wallace on Unsplash

Potential homebuyers in Austin may see improving mortgage rates and home prices in 2025, according to Zillow.

It looks like a few more people are about to turn their online home shopping daydreams into reality in 2025. Zillow, the famous real estate listings website, says in a press release that next year will likely bring "a gradual but bumpy decline in rates, impacting sales and price growth."

It attributes the forecast to "erratic and dramatic mortgage rate movements" throughout 2024, which will continue to affect the market. The website's housing market predictions report estimates that 2025 will see about 100,000 more sales than 2024, that home value growth will be "low and slow" at 2.2 percent, and that inventory and new listings will continue recovering from pandemic weakness.

On a local scale, Zillow's latest data shows Austin has already experienced a 3.4 percent drop in annual average home values from 2023 to 2024, which will continue fluctuating in 2025.

As of November, Zillow's home value index says the average home in the Austin metro is worth $443,995. That figure is greater than the Austin Board of Realtors' median home sales price in Austin-Round Rock-San Marcos, which came out to $435,000 last month, reflecting an estimated 2.4 percent increase for just the month of November year-over-year from 2023.

Pick the right season to buy
Potential buyers may see better opportunities for purchasing a home during the fall and winter, which is a typically slow season for home sales. Across 36 out of the 50 biggest U.S. metro areas, Zillow's heat market index showed a drop in competition from October to November.

"There's a strong sense of déjà vu on tap for 2025. We are once again expecting mortgage rates to get better gradually, and opportunities for buyers should follow, but be prepared for plenty of bumps on that path," said Zillow chief economist Skylar Olsen in the release. "Those shopping this winter have plenty of time to choose and a relatively strong position in negotiations."

Zillow suggests buyers may have the ability to negotiate "from a position of safety" during the slow winter months. This is especially true for Austin-area buyers, who only saw 10.4 percent of homes sell for more than their listing price in October. The website says buyers can take advantage of opportunities to buy contingent on inspections or repairs, and they may avoid bidding wars during this time.

"While the number of options available to shoppers today are lower than they will likely see in the spring, there's also less competition in the field," the report says. "The [national] share of homes that sold for more than list price was below 28 percent in October (the latest data available), continuing a downward trend that began in July."

Buyers will head to the Southwest
Eyes are also turning to the American Southwest as the top region for homebuyers in 2025, as 13 major metro areas – including Austin and San Antonio – are now considered “buyer’s markets” where buyers have more negotiating power than sellers.

However, this prediction depends on the gravity of falling mortgage rates. Homebuyers should also keep a close eye on mortgage rates in 2025, which could drop unpredictably like they have been for the last three weeks in a row. If the rates dip further than expected, that doesn’t bode as well for buyers.

“It is anticipated that a significant mortgage rate dip would bring more buyers than sellers back to the market, increasing competition and tilting negotiating power in favor of sellers,” Zillow says.

Small-home living is gaining traction
As Austin and other major cities are battling for more high density housing, buying trends are also leaning towards smaller (and more affordable) homes.

Zillow even goes as far to say that the “pandemic-era need” for large houses is officially a thing of the past.

"The term 'cozy' is appearing in more listing descriptions — 35 percent more in 2024 compared to 2023 — reflecting current design trends that have shifted away from cavernous open floor plans, toward contained spaces that have their own style and purpose," the report says.

housing market zillow