Austin's HOME rules allow two or three homes on most single-family lots. The homes built under them sold for a median of $750,000 in 2025, and traditional new single-family homes sold for $1,580,000. Per square foot, the two were about 9% apart. HOME sellers also accepted less than two-thirds of the list-price discount that sellers of traditional new homes accepted. The headline gap is real, but most of it comes from a smaller house. A HOME buyer pays close to new-construction rates for every foot, with less room to negotiate.
These numbers come from the Austin Board of Realtors and Unlock MLS HOME outcomes report, published in April 2026. It compares 57 HOME units with 115 traditional single-family homes, all built and closed within the City of Austin in 2025. It is the most detailed sales data available on these homes. It also shows a buyer coming from California or a suburban Austin new-build what the money buys in the urban core.
The $830,000 Gap, Taken Apart
The report puts the median price difference at $830,000. Here is how it breaks down:
| 2025 closings, City of Austin | HOME new construction | Traditional single-family new construction |
|---|---|---|
| Units analyzed | 57 | 115 |
| Median sales price | $750,000 | $1,580,000 |
| Median square footage | 1,693 | 3,029 |
| Median bedrooms | 3 | 4 |
| Median close price per sq. ft. | $477 | $522 |
| Discount from original list price | 6.1% | 10.6% |
| Median days on market | 32 | 37 |
The median HOME unit was 44% smaller than the traditional new home, and its median price per square foot was $45 lower. As rough arithmetic, 1,693 square feet at the traditional median of $522 would come to about $884,000. Pricing at $477 a foot brings that same space to roughly $808,000. Medians don't multiply perfectly, but the direction is clear. Smaller homes account for most of the gap, and lower land and construction cost per foot accounts for much less.
Land explains why. The report lists a 6,708-square-foot median lot for HOME sales, but it says that figure covers the whole property where the HOME project was built, not each unit's share. When two or three homes share that lot, each buyer gets a fraction of it, in neighborhoods where the report describes land as scarce and expensive. The traditional home's median lot was 8,276 square feet, and that buyer gets all of it. A HOME buyer pays $477 a foot for the house and a share of the land under it. That share is much smaller than the median lot figure suggests.
Sellers Gave Up Less at the Table
The per-foot math explains the price. The negotiation numbers show who had the leverage. In 2025, HOME sellers closed a median 6.1% below their original list price, and traditional new-construction sellers closed 10.6% below. HOME units also sold faster, at 32 days on market compared with 37. The report reads these as signs of strong buyer demand relative to supply, and it describes HOME product as "competitive, not distressed."
A HOME seller's median concession was a little under three-fifths the size of a traditional builder's, measured against each home's original list price. The large builder price cuts that buyers have seen on bigger new homes around Austin did not show up in HOME sales to the same degree in 2025.
The broader city market is softer now. In September 2026, homes in the City of Austin closed at an average 92.5% of original asking price, up from 90.8% a year earlier, according to Unlock MLS figures reported by My Neighborhood News. The two figures cover different periods and are measured differently, so they don't compare directly. Even so, the 2025 HOME sales closed closer to list than the citywide average does today.
The Median Hides a Split Market
A $750,000 median suggests a tight band of prices clustered around it. The 2025 sales were spread much more widely:
- Under $500,000: 3 of 57 sales, or 5.3%
- $500,000 to $899,999: 36 sales, about 63%
- $900,000 to $1,099,999: 6 sales
- $1,200,000 and up: 12 sales, or 21.1%
About one in five HOME units sold for $1.2 million or more, which puts them in the same price range as many traditional new homes. Below $500,000, HOME is still almost the only new construction in the core. The report says that once 14 homes in a master-planned community outside the urban core are excluded, only 2.0% of traditional new single-family sales came in under $500,000.
Location explains much of the spread. HOME sales clustered along central corridors from South Congress through East Austin and into north-central neighborhoods. Projects reported so far show the range. Community Impact photographed a three-unit project in Cherrywood. In January 2025, The Austin Bulldog reported that Carr Residential was marketing three 1,668-square-foot homes at 1900 Keilbar Lane for $599,000 each and three 1,620-square-foot homes at 4808 Lott Ave. in East Austin "in the 500s." Those were asking prices from nearly two years ago, not closed sales. They show that the lower end of the HOME range depends on where the lot is.
Why Supply Stays Thin
Strong pricing makes more sense once you compare approvals with finished homes. The city's HOME Phase 1 tracker, updated October 6, 2026, shows 931 applications reviewed, 742 approved and 1,482 new units approved. The 2025 sales sample had 57 units, while the city's first annual report counted 436 Phase 1 units approved. Community Impact's November 2025 coverage noted that some approved projects later stalled or were withdrawn. A buyer can only purchase homes that are finished and listed, and that number is far smaller than the approval count.
Phase 2 is producing even less. It created a separate path for single homes on lots as small as 1,800 square feet. As of spring 2026, about 40 small-lot buildings and six subdivisions were advancing under Phase 2, according to Community Impact. Unless a lot is already under the standard 5,750 square feet, the owner has to subdivide before building a small-lot home. The ABoR report identifies challenges with the city's subdivision process as the main limit on Phase 2 projects. As a result, most HOME homes for sale are units that share a lot, and few are detached homes on their own small lots.
A Drainage Condition Can Come With Newer Lots
On newer small lots, one permitting detail can affect closing. In March 2025, City Council changed drainage rules for most residential resubdivisions of one acre or less. Under the city's HOME amendments page, a lot created before June 16, 2025 with no more than four units needs no drainage review. A lot created after that date and approved subject to a grading plan under LDC § 25-7-67 must comply with that plan during building permit review and inspection. Depending on the plan, the property may have to be graded to send runoff toward the street before a certificate of occupancy is issued.
For a buyer under contract on a home still under construction on a recently created lot, the grading plan can affect when the certificate of occupancy is issued and when the sale closes. The ordinance text is public. This post is general information and not legal advice. A buyer facing this situation should confirm how the rule applies to a specific property with a qualified attorney or the builder's engineer.
The Rules Are Being Rewritten
On May 7, 2026, City Council adopted Resolution 20260507-026. It directs staff to propose changes covering lot width, zero side-yard setbacks, two homes on lots from 3,600 to 5,750 square feet, subdivision costs, porches, garages and related standards. Council member Krista Laine sponsored the resolution and told Community Impact that "HOME is working, and we owe it to our city to enable it to do the most efficient and effective work possible."
Here is the schedule so far:
- May 7, 2026: Resolution adopted.
- December 3, 2026: Deadline for initial code amendments to reach Council.
- November 2027: Anticipated review and adoption of HOME Improvement Phase 1, according to the city's October 2026 code amendment tracker. The tracker lists the Phase 2 timeline as "to be determined."
If the changes make subdivision easier and allow two homes on a 3,600-square-foot lot, they could increase the number of detached small-lot homes for sale. Nothing has been adopted yet, so buyers shopping today are working with the current rules and current supply.
How HOME Prices Compare With the Rest of Austin
In September 2026, the City of Austin's median sale price was $570,958, up 4.2% from a year earlier. Sales fell 12.7% to 777, and there were 4,502 active listings and 5.4 months of inventory. The metro-wide median was $421,000. The 2025 HOME median of $750,000 is well above the current citywide figure. The periods differ, but the gap is large enough to matter.
ABoR is direct about affordability. It estimates that a household of two new Austin ISD teachers or two new EMS field medics could afford roughly $370,000 to $380,000, about half the HOME median. The report argues that HOME helps affordability another way. New homes at higher prices draw buyers who would otherwise compete for older, cheaper homes. For a buyer comparing options, a HOME unit offers new construction in a central location with three bedrooms and a smaller share of land. It costs more than the typical Austin home and less than a typical new detached home in the core.
FAQ
Are HOME units large enough for a family? In the 2025 sales, the median HOME unit had three bedrooms and 1,693 square feet.
Does Texas SB 15 explain Austin's small lots? No. SB 15 took effect September 1, 2025 and applies to qualifying new subdivisions of at least five acres. Austin's infill activity comes from its own HOME rules, which Council adopted in December 2023 and May 2024.
Where are most HOME homes? Most 2025 sales were along central corridors from South Congress through East Austin and into north-central Austin.
Comparing a HOME unit with a larger home farther out comes down to price per foot, how much of the lot you get and how much room there is to negotiate. If you're relocating from California or moving up within Austin, The Jesse Group can compare specific HOME listings with nearby resale and new-construction sales and help you weigh the trade-offs. Schedule a Consultation, and we'll go through the numbers with you.
