FOR IMMEDIATE RELEASE For information contact: Madison Inselmann @ 512.473.2250, ext. 1000 or 512.720.2900 E-mail: madisoni@metrostudy.com Metrostudy: Austin's housing market is experiencing grow ing interest rates, growing prices, and still growing demand (Austin, TX - October 1st, 2013) Interest rates stole the headlines, but not the closings, in the third quarter in Austin. While rising interest rates do have an effect on the monthly payment for the prospective buyer, the strength of the Austin economy and the size of the pent up demand was able to withstand the rate hike, at least in the short term, according to a report from Metrostudy, a national housing information and consulting firm. In the third quarter of 2013, Metrostudy recorded 2,639 starts, a 12% (328 units) increase from 3Q2012's strong report last year. In the last twelve months Austin builders have started 9,290 new homes, a pace 30% higher than the same period a year ago. Through the third quarter, builders closed 2,374 new homes, 26% more than 3Q-2012. As a result, Austin's annual starts rate grew to 8,462, the highest rate since the beginning of 2009. "New lot development can't occur fast enough, as new home starts outpace lot delivery despite 2013 seeing the strongest new lot construction since 2008," said Madison Inselmann Regional Director of Metrostudy's Austin market. Since the recession began in Austin in 2009, developers delivered 4,722 new lots on an annual basis. Already this year developers have brought 6,583 new lots to market. Nevertheless, the strong return of new home demand to the Austin market has driven builders to start 7,212 new homes, year to date. The new home construction has dropped the VDL count to only 14,231. Austin's current lot supply rests at 18.4 months, just below the 20 to 24 months considered equilibrium for the market. Tight supplies of new, resale, and rental housing continues to strengthen pricing in the Austin market. In its latest report, the Federal Housing Finance Agency reported that Austin area homes experienced a 7.7% appreciation in value over the last twelve months. "Austin's consistently strong job growth and recent population influx have absorbed much of the available inventory and have driven Austin's new home price to the highest in the State," reports Inselmann. Growing 8% from the previous year, the median new home start pace in the third quarter was just short of $247,000. "The combination of growing interest rates and growing prices could impact affordability in Austin, though in the short term, the Austin buyer has proven resilient enough to successfully respond to each," declares Inselmann. Going forward, the rate of increase in the interest rate will have the most direct impact on affordability. "Over the last two years, the housing market has been lulled to sleep with the historically low rates. The fact that the rate increased has been more shocking than the actual rate itself," states Inselmann. While the current rate of 4.4% is not as low as the record setting rate a year ago, it still provides strong affordability for today's consumer, in a historical sense. " About Metrostudy Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide. Established in 1975 in Houston, Metrostudy provides research, data, analytics, and consulting services that help builders, developers, lenders, suppliers, retailers, utilities, and others make investment and business decisions every day. www.Metrostudy.com About Hanley Wood Hanley Wood, LLC is the premier media, event, information, and strategic marketing services company serving the residential, commercial design, and construction industries. Through its operating platforms, the company produces awardwinning digital and print publications, newsletters, websites, marquee trade shows and events, market intelligence data, and strategic marketing solutions. The company also is North America's leading publisher of home plans.