Zoe Alvarez
As of 2025, rents in Austin, Texas, have been falling for nearly two years. The average monthly rent in the Austin area has declined by 6% compared to 2024, with the average monthly rent for an apartment now at $1,528, down $100 from the previous year. This is due to a massive apartment building boom in the Austin-Round Rock region, which has driven rents downward, according to real estate experts and housing advocates. While rents are falling, the cost of living in Austin is still high, with nearly half of the Austin-Round Rock region's renters being cost-burdened, meaning they spend more than 30% of their income on rent and utilities.
| Characteristics | Values |
|---|---|
| Rents in Austin | Falling |
| Reason | Massive apartment building boom |
| Average monthly rent in Austin | $1,528 |
| Average monthly rent in 2022 | $1,628 |
| Average leased rent in August 2022 | $2,571 |
| Average leased rent in August 2024 | $2,353 |
| Median leased rent in August 2022 | $2,300 |
| Median leased rent in August 2024 | $2,195 |
| Median asking rent in May 2025 | $1,399 |
| Median asking rent during the pandemic | $1,799 |
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What You'll Learn
The apartment building boom in Austin
Austin has witnessed a surge in apartment construction, ranking third in the US for the highest apartment construction rate between 2020 and 2022. This trend continued into 2023, with Austin claiming the top spot for new apartment construction nationwide. While there are indications of a slight slowdown in 2024, Austin still boasts one of the fastest construction rates in the country.
Several factors have contributed to this building boom. Firstly, Austin has experienced steady population growth, attracting people with its thriving job market, particularly in the tech industry. The expansion of major employers, such as Tesla and Oracle, has further fuelled the demand for rental apartments. Additionally, the rise of remote work has drawn people from more expensive coastal cities, as apartments in Austin offer a more affordable alternative.
The pandemic also played a significant role in the construction boom. Low-interest rates and an influx of new residents during the early years of the pandemic created profitable conditions for developers. In 2022, developers initiated the construction of about 40,000 new apartments, a number that exceeded any previous year. However, as the population surge slowed, the market became saturated with rental options, leading to a shift in dynamics.
This oversupply of apartments has resulted in a unique scenario where rents in Austin have been falling for nearly two years. As of 2024, the average monthly rent in the Austin area has declined by approximately 6% compared to the previous year. This decrease in rent prices is not limited to new or luxury apartments but is evident across the spectrum, including older and more affordable complexes.
While this trend of declining rents is good news for tenants, it presents challenges for landlords, who now face increased competition to attract and retain tenants. The future trajectory of rent prices in Austin remains uncertain, but for now, the market appears to be stabilising after a period of rapid price increases.
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The impact of the pandemic
The COVID-19 pandemic caused a population boom in Austin, as tens of thousands of new residents moved to the city, and the region experienced a job market boom. This led to a surge in demand for rental properties, and rent prices rose at an incredible pace.
In response to this demand, developers started building a significant number of new rental homes. In 2022, they started construction on about 40,000 new apartments, more than any other year. This was further encouraged by the Austin city government, which made building new apartments easier by removing the requirement to construct parking alongside homes and reducing the amount of space needed to build a house.
However, this surge in apartment construction has now led to a glut of supply, with tens of thousands of new apartments hitting the market. As a result, Austin has seen a sustained drop in rent prices over the last two years, with prices falling across the spectrum of buildings.
While this is good news for tenants, it has negatively impacted landlords and developers, who are now facing increased competition to attract tenants and lower profits. Some developers have even started to pause new construction projects due to increased building costs and decreased incentives.
It is unclear how long this downward trend in rent prices will last. If demand picks up again or if the supply of new apartments decreases, rent prices in Austin could start rising once more.
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Renters still struggle to find affordable housing
While rents in Austin have been falling over the past two years, renters still struggle to find affordable housing.
The average monthly rent in the Austin area has declined by 6% since May 2023 compared to the previous year. This is the longest sustained drop in rent prices in the past decade. The primary cause of this downward trend is the surge in apartment construction and the decrease in demand for rentals.
During the pandemic, tens of thousands of people moved to Austin, and rent prices soared. In response, developers started constructing tens of thousands of new apartments. However, the population surge has since slowed, and the increased supply of apartments has outpaced demand, leading to a decline in rent prices.
While this may seem like good news for renters, affordability remains an issue. Nearly half of all renters in the Austin area live in housing they cannot afford, spending more than 30% of their income on rent and utilities. This leaves them with less money for other essential needs such as groceries, transportation, and healthcare.
The situation is even more challenging for those who are "severely" cost-burdened, with almost a quarter of households dedicating at least half of their income to rent and utilities.
As the market adjusts and rent prices stabilize, there is a concern that builders will slow down or stop construction, potentially leading to a shortage of supply and rising rents once again. Therefore, renters in Austin continue to face challenges in finding affordable housing options, despite the recent decline in rent prices.
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The potential for rising rents again
While rents in Austin have been falling for nearly two years, there is a possibility that they may rise again in the future.
The primary reason for the recent decline in rents is the massive apartment building boom in the Austin-Round Rock region. During the pandemic, tens of thousands of people moved to Austin, and developers rushed to build new apartments, with about 40,000 new apartments constructed in 2022 alone. This surge in supply, coupled with a decrease in demand as the population surge slowed, has driven rents downward.
However, there are a few factors that could contribute to a potential rise in rents again. Firstly, while there has been a construction boom, builders have started to pull back on new projects due to increasing construction costs and interest rates. If the existing units start filling up without many new apartments being built, the city could face rising rents again.
Secondly, the decline in rental rates could be a broader market trend, potentially impacting housing prices. As rental demand cools and prices drop, it could signal a shift in the housing market, leading to a decrease in housing affordability.
Additionally, it's important to note that despite the overall decline in rents, affordability is still a concern for many renters in Austin. Nearly half of all renters in the Austin area were living in unaffordable housing in 2022, according to Harvard University's Joint Center for Housing Studies. While rents may be falling, they are still above pre-pandemic levels, and many individuals continue to struggle with the high cost of shelter.
Therefore, while rents in Austin have been on a downward trajectory, there is a possibility that they could rise again, especially if construction slows and demand starts to outpace supply. The market dynamics are complex, and it remains to be seen whether the downward trend in rents will be sustained or if external factors will contribute to a shift.
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The role of government and policymakers
One approach is the implementation of rent control measures, which involve government-imposed limits on the amount landlords can charge for leasing or renewing a lease. The effectiveness of rent control is a subject of ongoing debate. On the one hand, rent control can curb rent increases and provide relief to tenants, particularly lower-income households facing affordability challenges. However, critics argue that rent control may lead to reduced housing supply as landlords opt to sell or convert rental units, ultimately exacerbating housing shortages and driving up prices in the long run.
The design and implementation of rent control policies are crucial. Well-designed rent control programs may help stabilize the housing market without creating distortions. Targeting rent control towards the neediest households can improve welfare and ensure that those who need it most benefit from these measures. Additionally, combining rent control with other interventions, such as increasing the supply of affordable housing through construction booms, can help alleviate pressure on the rental market.
In the case of Austin, Texas, rents have been on a downward trajectory for nearly two years, primarily due to a massive apartment construction boom. This increase in supply has driven competition among landlords, leading to flat or reduced rents. While this has provided some relief to tenants, it is important to consider the broader context of housing affordability. Policymakers should monitor the situation to ensure that declining rents do not lead to reduced supply or a future surge in rents.
To promote long-term housing affordability and stability, policymakers can employ a range of tools beyond rent control. These include providing incentives for landlords to maintain affordable rents, offering subsidies or vouchers to tenants in need, and investing in the development of affordable housing units. Additionally, policies that encourage mixed-income communities and prevent housing discrimination can contribute to a more equitable rental market.
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Frequently asked questions
Rents in Austin have been falling for nearly two years.
A massive apartment building boom in the Austin-Round Rock region has driven rents downward. While the population surge that defined Austin in 2020 and 2021 has slowed, thousands of new apartments are still opening.
It's unclear how long the downward trend in Austin rents will last. While nearly 17,000 apartments are under construction, builders have pulled back on new projects. If existing units start filling up in Austin without as many new apartments being built, the city could once again face rising rent prices.
While rents in Austin are down, many renters still struggle to find housing they can afford. Nearly half of all renters in the Austin area live in housing they cannot afford.
