Work Hard for the Money

Here's how many hours you must work to afford rent in Austin

Breaking news: Rent is still really high in Austin.

The recent news that it might be cheaper to rent than to buy in Austin has brought about another question: How do I afford this rent? Austin is a pricey city, and it feels like housing costs are getting higher by the day.

So finance website SmartAsset did a study to find out how many hours a person in each of the nation's 15 largest cities would have to work in order to pay their rent.

By looking at average hours worked per week, average weeks worked per year, median annual individual income, and median monthly gross rent (all pulled from the U.S. Census Bureau), the site determined that Austinites are toiling for 59.8 hours each month in order to write a $1,047 rent check.

SmartAsset calculated that the estimated hourly wage here is $17.52, which is actually pretty high when compared to Los Angeles' $13.78 or New York's $15.74. But we need that extra cash, because Austin has the highest rent of any Texas city in the study — by a lot.

Hard-working Dallas residents are putting in 171 total hours a month, but at $14 an hour need only 61.7 of those to afford their $863 rent. Houstonians are funding their monthly $873 cost by working for 62.8 hours at a wage of $13.91 per hour.

And though San Antonio has the cheapest Texas rent ($856), it also has the lowest hourly wage ($13.53). That means workers there have to put in the most time (63.3 hours) in order to cover their rent.

The study reinforces the expensiveness of big-city living, as even Indianapolis and Columbus — where you need to work the fewest hours to pay rent — have folks dedicating an average of 53.8 hours of work per month to it. But when compared with Los Angeles' 87.7 hours, our 60-ish hours don't seem so bad.

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How Austin fits into Zillow's predicted housing market growth in 2025

Photo by Justin Wallace on Unsplash

Potential homebuyers in Austin may see improving mortgage rates and home prices in 2025, according to Zillow.

It looks like a few more people are about to turn their online home shopping daydreams into reality in 2025. Zillow, the famous real estate listings website, says in a press release that next year will likely bring "a gradual but bumpy decline in rates, impacting sales and price growth."

It attributes the forecast to "erratic and dramatic mortgage rate movements" throughout 2024, which will continue to affect the market. The website's housing market predictions report estimates that 2025 will see about 100,000 more sales than 2024, that home value growth will be "low and slow" at 2.2 percent, and that inventory and new listings will continue recovering from pandemic weakness.

On a local scale, Zillow's latest data shows Austin has already experienced a 3.4 percent drop in annual average home values from 2023 to 2024, which will continue fluctuating in 2025.

As of November, Zillow's home value index says the average home in the Austin metro is worth $443,995. That figure is greater than the Austin Board of Realtors' median home sales price in Austin-Round Rock-San Marcos, which came out to $435,000 last month, reflecting an estimated 2.4 percent increase for just the month of November year-over-year from 2023.

Pick the right season to buy
Potential buyers may see better opportunities for purchasing a home during the fall and winter, which is a typically slow season for home sales. Across 36 out of the 50 biggest U.S. metro areas, Zillow's heat market index showed a drop in competition from October to November.

"There's a strong sense of déjà vu on tap for 2025. We are once again expecting mortgage rates to get better gradually, and opportunities for buyers should follow, but be prepared for plenty of bumps on that path," said Zillow chief economist Skylar Olsen in the release. "Those shopping this winter have plenty of time to choose and a relatively strong position in negotiations."

Zillow suggests buyers may have the ability to negotiate "from a position of safety" during the slow winter months. This is especially true for Austin-area buyers, who only saw 10.4 percent of homes sell for more than their listing price in October. The website says buyers can take advantage of opportunities to buy contingent on inspections or repairs, and they may avoid bidding wars during this time.

"While the number of options available to shoppers today are lower than they will likely see in the spring, there's also less competition in the field," the report says. "The [national] share of homes that sold for more than list price was below 28 percent in October (the latest data available), continuing a downward trend that began in July."

Buyers will head to the Southwest
Eyes are also turning to the American Southwest as the top region for homebuyers in 2025, as 13 major metro areas – including Austin and San Antonio – are now considered “buyer’s markets” where buyers have more negotiating power than sellers.

However, this prediction depends on the gravity of falling mortgage rates. Homebuyers should also keep a close eye on mortgage rates in 2025, which could drop unpredictably like they have been for the last three weeks in a row. If the rates dip further than expected, that doesn’t bode as well for buyers.

“It is anticipated that a significant mortgage rate dip would bring more buyers than sellers back to the market, increasing competition and tilting negotiating power in favor of sellers,” Zillow says.

Small-home living is gaining traction
As Austin and other major cities are battling for more high density housing, buying trends are also leaning towards smaller (and more affordable) homes.

Zillow even goes as far to say that the “pandemic-era need” for large houses is officially a thing of the past.

"The term 'cozy' is appearing in more listing descriptions — 35 percent more in 2024 compared to 2023 — reflecting current design trends that have shifted away from cavernous open floor plans, toward contained spaces that have their own style and purpose," the report says.

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