Blog

So, you’re thinking of buying a home or renting an apartment in the Austin area? Are you moving into Austin and need a place to live? Well, the housing market here is robust, but getting a good deal on an apartment or favorable terms on a home loan depends on having a good credit score

This article will provide a picture of what the Austin home market is like, and what kind of credit score you might need to get a place you’ll love.

Current Housing Market in Austin

Stated by credit repair Austin experts, while housing prices across the country are dipping as of 2019, and properties are lingering on the market longer than before, some local markets are thriving, which means there’s fierce competition for buyers and renters alike. 

The real estate market here in Austin is one such market, and it ranks as one of the hottest in 2019 and looks to get even better in 2020. According to Zillow, median home values in the Austin area grew by over 6% as of June 2019, and most experts expect that growth to continue, albeit more slowly, over the next year.

 

Because of a thriving job market, values for homes in Austin have continued to grow since 2012, and while this trend is the same for many major metro areas, Austin is one of the strongest. 

While many homes stay on the market longer in other areas — some up to 50 days or more — here in Austin, the average time for a home to be on the market is 12 days, which indicates a healthy housing market with a lot of potential.

One of the major driving factors in the Austin housing market is the incredible population growth as it ranks consistently as one of the best places to live.

Another factor that drives up value here in Austin is the supply/demand ratio when compared to other cities in Texas. 

According to the Home Buying Institute:

As of May 2019, the Austin area had less than a two-month supply of homes for sale. A “balanced” real estate market has closer to five or six months worth of supply. 

austin housing market

What About Affordability?

With a population that’s growing and an economy that’s booming, it’s no surprise that homebuyers and apartment hunters are concerned about affordable housing. 

Although home prices in Austin are climbing and continue to climb, many experts say Austin is still one of the more affordable places when compared to more saturated markets like San Diego and Seattle.

Still, experts advise that if you’re planning on relocating to Austin, you’re going to have your work cut out for you because there is a high demand and low inventory. 

The competition for housing is fierce, which is why it’s advised that you start looking for a house or apartment as soon as possible to give yourself plenty of time to find the right place at the right price. 

Since homes do not sit on the market long in Austin, deciding to wait or ‘think about it’ may mean losing a property to someone else who’s ready to buy. 

Lastly, take advantage of low mortgage rates, which have decreased dramatically over the last few years. The average rate for a 30 year fixed mortgage loan decreased to 3.8% as of June 2019. But to get these low rates, you’re going to need a good credit score, which takes us to the next topic.

What Credit Score Do You Need For A Home in Austin?

So, if you’re looking for a home, it’s essential you examine your credit score before you apply for a loan. Your credit score is a significant determinant factor in whether or not you get a loan and what terms you get with interest rates. 

credit score for austin homeThe higher your score, the more favorable terms you’ll get, and the lower the down payment you’ll need.

While there are a variety of home loans you can apply for, in general, the average credit score for Texas first time home buyers is 671, according to Credit Karma. However, the credit score you need depends on the type of loan you’re getting. 

For example:

With an FHA Loan, you may be able to get that with a score of 580 or above. A VA Loan can be had with a score of 620 or more. A USDA Loan can be gotten with a score of 640 or above, and a conventional loan can be gotten with a score of 620 or above.

What About Renting?

If you’re interested in renting an apartment, your score is still important, but not as much as when you’re getting a loan. Most people or companies who are renting out apartments will expect you to have a score of 620+. 

However, because Austin is a hot market, and demand is high, rental companies and landlords may want to see scores over 700.

While landlords differ in what they look for, generally speaking, they want to know about your income and your credit history to show them you have the money to pay your rent and you’re responsible for making your payments on time.

Just like a low score may get you denied for a home loan, so too will a low score get you denied for an apartment.

Because your credit score is so important when renting or buying, it’s essential that you do all that you can to improve your credit score if it’s not where you want it to be before you begin shopping. 

The best way to improve a low score is to start making all of your payments on time and pay off your debt as quickly as possible. If you need help, contact a credit repair company to get you back on track to get you into the home of your dreams.