Austin, September 25, 2025
News Summary
Austin’s rental market is seeing a significant decline, with apartment rents sharply dropping due to record high vacancies. As of June, rental prices decreased by 6.1%, outpacing national and state declines. The city’s vacancy rate has risen to 9.6%, leaving landlords struggling. High vacancy rates combined with an influx of newly constructed apartments are putting pressure on rental prices. Looking ahead, rental prices are expected to stabilize by 2027, further influenced by a slow down in new construction and the push for affordable housing initiatives.
Austin’s Rental Market Faces Significant Downturn with Record High Vacancies and Falling Prices
Austin’s rental market is currently experiencing a significant decline, with apartment rents across the city dropping sharply, driven by record high vacancies. As of June 2025, rental prices in Austin have decreased by 6.1% compared to June of the previous year, a downturn that surpasses the national average decline of -0.7% and Texas state average of -2.6%.
Between May and June 2025, rent prices stagnated, with an insignificant decrease of 0.02%. The vacancy rate for apartments in Austin has risen to 9.6%, a 0.5 percentage point increase from the same point last year, leaving landlords struggling to fill their units amid falling demand.
While rents in downtown Austin are increasing, the broader market has seen substantial drops. Wells Branch has experienced a staggering 11.5% decline in rental prices, while Leander has followed suit with an 8.3% reduction. This decrease is particularly significant given the sharp rise in rent prices that occurred in 2021, marked by an explosive 23.4% surge. Following this peak, rents have continued to decrease each year, including a 5.1% drop in 2023 and a projected 6.3% for 2024.
Currently, Austin ranks 56th among major U.S. cities for median rent, with the average cost for a one-bedroom apartment at $1,224 and a two-bedroom apartment at $1,489. This financial burden highlights the challenges faced by local renters, who earned an average hourly wage of $33.25 (approximately $70,000 annually) as of May 2023. Comparatively, the typical U.S. homebuyer needs to earn over $50,000 more than the average renter to cover monthly housing costs.
Market Dynamics and Construction Trends
The rental market’s decline can be attributed to multiple factors, including an influx of newly constructed apartments. A significant record of new developments was completed in 2023 and 2024, which has contributed to the current declining rents. However, the approval of new multifamily housing permits is sharply decreasing, falling below pandemic-era levels, indicating a slowdown in construction.
In conjunction with high vacancy rates, rent prices are expected to remain under pressure. While Austin leads in multifamily housing permits compared to any other major metro analyzed by Redfin, the slowdown in new construction has raised concerns about the sustainability of the housing market. Local builders are currently facing challenges, particularly due to high-interest rates impacting the feasibility of new projects.
Future Projections
Looking ahead, upcoming rental prices in Austin are anticipated to stabilize by 2027 as the construction pipeline diminishes further. Despite the current long-term downturn, efforts are underway to encourage housing development. Mayor Kirk Watson is advocating for the reexamination of incentive programs to promote taller building developments intended for affordable housing.
In response to the saturated rental market, many landlords are offering promotions, including free rent and waived fees, to attract hesitant renters. These strategies aim to entice tenants amid growing vacancies and softening rental prices.
Key Features:
- June 2025: 6.1% decrease in Austin’s rent compared to last year.
- Current vacancy rate: 9.6%, up 0.5 percentage points from the previous year.
- Wells Branch rental prices dropped 11.5%; Leander saw an 8.3% reduction.
- Austin’s median rent: one-bedroom at $1,224, two-bedroom at $1,489.
- Current average hourly wage for Austin renters: $33.25.
- Projected stabilization of rental prices by 2027.
FAQ Section
What was the decline in Austin’s rental prices as of June 2025?
Austin’s rent decreased by 6.1% compared to June last year.
How does Austin’s rent decrease compare to national averages?
This decline is significantly below the national average of -0.7% and Texas average of -2.6%.
What is the current apartment vacancy rate in Austin?
The citywide apartment vacancy rate has reached 9.6%, marking a 0.5 percentage point increase from the previous year.
What changes have occurred in multifamily housing permits in Austin?
The approval of new multifamily construction has plummeted, with expectations of low deliveries going forward.
What are rental prices projected to do in the coming years?
Upcoming rental prices in Austin are expected to stabilize by 2027 as the construction pipeline diminishes.
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Additional Resources
- KVUE News
- Wikipedia: Austin
- Axios Austin
- Google Search: Austin Rental Market 2025
- Newsweek
- Google Scholar: Austin Real Estate Market
- CPA Practice Advisor
- Encyclopedia Britannica: Austin Housing Market
- Austin American-Statesman
- Google News: Austin real estate 2025
Author: STAFF HERE AUSTIN WRITER
The AUSTIN STAFF WRITER represents the experienced team at HEREAustinTX.com, your go-to source for actionable local news and information in Austin, Travis County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as SXSW, Austin City Limits Music Festival, Formula 1 United States Grand Prix, and the Austin Film Festival. Our coverage extends to key organizations like the Greater Austin Chamber of Commerce and Visit Austin, plus leading businesses in technology, automotive, and retail that power the local economy such as Dell Technologies, Tesla, and Apple. As part of the broader HERE network, including HERECollegeStation.com, HEREDallas.com, HEREHouston.com, and HERESanAntonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
