Cost-of-living concerns

Austin drives home highest one-year spike in apartment rents in Texas

Rents rose more than 30 percent in Austin in the last year.

If you’re feeling financially squeezed as a renter in Austin, maybe you can take comfort in the fact that you’re not the only one who’s not at home with rent costs spiking.

According to new data from rental platform Zumper, Austin recorded the highest increase in Texas in the average rent for a one-bedroom apartment — 30.3 percent — from February 2021 to February 2022. This February, the average rent here was $1,550.

“Rent’s rapid rise is largely tied to the home sales market. As home prices rise, they price out renters who would otherwise buy,” Zumper says. “And because the home sales market has gotten so hypercompetitive, many frustrated renters in the market for a home have simply given up because the process is so exhausting and demoralizing.”

As a result, the home sales market is keeping some tenants in the rental market longer than they’d like to be, leading to higher rents overall, according to Zumper.

Among the 100 cities included in Zumper’s latest rental index, Miami experienced the steepest year-over-year rise in the average rent for a one-bedroom apartment: 34.4 percent.

Elsewhere in Texas, Plano, near Dallas-Fort Worth, witnessed the average rent for a one-bedroom apartment rise 17.1 percent to $1,440 from February 2021 to February 2022. Irving ranked second in DFW, with a 16.7 percent year-over-year spike in the average rent for a one-bedroom apartment. Irving’s average rent stood at $1,330.

Dallas landed at No. 3 in the region, with a 13.4 percent jump in the average rent for a one-bedroom apartment from February 2021 to February 2022. The average rent in Dallas was $1,440, according to Zumper.

In Fort Worth, the average rent for a one-bedroom apartment climbed 9 percent to $1,210, while it increased 8.4 percent in Arlington to $1,030.

The average rent for one-bedroom apartment in San Antonio climbed 11.3 percent from February 2021 to February 2022, winding up at $1,080.

In Houston, the increase was 9.9 percent, ending up at $1,220.

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Homebuyers can afford to be picky as Austin housing inventory rises

Photo by Avinash Kumar on Unsplash

Housing economist Clare Losey said the most significant factor affecting home sales in Austin is high mortgage rates.

The latest real estate report from Unlock MLS and the Austin Board of Realtors (ABoR) has revealed housing inventory is still on a steady rise in the Austin-Round Rock-San Marcos MSA, creating more choices for potential homebuyers as they navigate a high interest rate market.

Residential home sales dipped by a mere 1.5 percent year-over-year from October 2023, amounting to 2,248 closed sales in the Austin-Round Rock-San Marcos MSA. Median prices have also dropped to $430,000, or 3.2 percent less than this time last year. More than 3,300 new home listings were added on the market — a 7.4 percent increase from 2023 — bringing the total number of active home listings to 11,599.

According to Unlock MLS and ABoR housing economist Clare Losey, Ph.D., October's mortgage rates stood at 6.4 percent and are showing no signs of a significant drop in the near future. Even heading into 2025, Losey says potential homebuyers who are biding their time in the hopes of seeing rates plummet "may be in for a long wait."

"In the meantime, sellers must recognize that bringing buyers to the table requires a more aggressive pricing approach," Losey said. "Even in a more balanced market, buyers with limited purchasing power are struggling to meet current price expectations."

As for the overall health of the Central Texas housing market, 2024 Unlock MLS and ABoR president Kent Redding labeled recent news reports that called Austin "ground zero" for a downturn as an "extreme over-exaggeration."

"Austin led the state and nation in record-breaking home price growth and sales activity during the pandemic," Redding said. "For three years, near-zero housing inventory, numerous offers above list price and a rapid-paced market raised home prices and left little negotiating power for buyers. During this record-setting growth, ABoR and Unlock MLS consistently emphasized the unsustainability of the rapid growth, and now, our market is working to balance those extremes."

Central Texas housing trends in October 2024

In Travis County, 979 homes were sold last month — a slight 2.5 percent increase from last year. Median prices remained flat year-over-year at $510,000. Active home listings continued growing to 5,702 homes, which is 9.4 percent more year-over-year.

In Williamson County, 807 homes were sold in October, with median prices steadily dropping to $420,000. There were 1,028 new home listings on the market, showing a 4.5 percent increase from October 2023, bringing the total number of active home listings to 3,369.

Residential home sales dropped by nearly eight percent in Hays County in October, totaling 315 sales. Median prices also fell 5.5 percent year-over-year to $359,000. Active listings rose 6.6 percent year-over-year to 1,740 homes with the addition of 534 new listings on the market.

Meanwhile, 114 homes were sold in Bastrop County last month, which is 4.4 percent more than this time last year. Median prices dropped by a single percentage point year-over-year to $355,000. There were 654 active listings on the market in October, and 152 new home listings, representing a 1.3 percent slip in new inventory when compared to last year.

Only 33 homes were sold in Caldwell County in October to reflect a near 14 percent decline year-over-year from October 2023. Median prices fell to $262,990, which was a 13.5 percent decrease from last year. There were 136 active homes on the market last month, and 40 new homes added on the market.

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