First-Time Buyers Surge in Austin Despite Rising Starter Home Prices

First-time buyers closed on 31 percent of Austin homes sold between April and June 2026, up from 26 percent in the same period last year, according to the Austin Board of Realtors market report released this week.

The increase arrives as the city’s overall median sale price reached $478,000 in June, a 4 percent rise from twelve months earlier, while mortgage rates remained above 6.4 percent for most of the spring. Local lenders report that many buyers who delayed purchases in 2025 are now competing for homes priced under $450,000, the segment where entry points remain most accessible.

Neighborhoods drawing new buyers

Activity has concentrated in Hyde Park, where 22 homes under $425,000 changed hands in the second quarter, and along East Cesar Chavez Street, where three-bedroom bungalows listed between $395,000 and $440,000 drew multiple offers within ten days. The City of Austin’s down-payment assistance program, administered through the Austin Housing Finance Corporation, approved 184 applications in the first half of 2026, compared with 137 during the same stretch in 2025. Program staff noted that 68 percent of recipients purchased in the 78751 and 78702 zip codes.

Inventory in those corridors stayed low, with only 1.8 months of supply at current sales rates. Agents at the Austin Board of Realtors multiple listing service recorded 412 first-time buyer contracts in the two neighborhoods combined during the quarter.

Prices and next steps

Median prices for homes under 1,600 square feet in Hyde Park climbed to $419,000 in June, while similar properties near East Cesar Chavez Street averaged $398,000. The Austin Board of Realtors data showed first-time buyers financed an average loan amount of $352,000, with 41 percent using some form of city or state assistance. Buyers who close by the end of August can still lock in current assistance levels before the program’s next funding cycle begins in September. Those preparing to enter the market are advised to review income limits on the Austin Housing Finance Corporation website and contact two approved lenders before touring homes in target neighborhoods.