RENT'S DUE

Austin rent prices increased nearly 10 percent from 2022, report finds

Zumper ranked Austin the No. 25 most expensive rental market in the United States.

Photo courtesy of TexasApartmentRentals.com

Apartment rent keeps going up in Texas, and in Austin the increase is nearly 10 percent more than last year, making it increasingly difficult to afford living in the city. That’s according to a new national rent report from online rental marketplace Zumper.

Despite rent increases showing a small slowdown month-over-month, overall prices are still on the high side from the previous year. For example, the average rent for a two-bedroom apartment in Austin is $2,070 now, in March of 2023, which is a one percent increase from the previous month, but a nearly 10 percent increase from 2022 at 8.4 percent. The average rent for a one-bedroom is $1,670, which is a mere .60 percent increase month-over-month, but a whopping 7.7 percent increase from last year.

The report looked at rental data from more than one million active listings in the top 100 cities in the United States to determine the rankings. Zumper ranked Austin the No. 25 most expensive rental market across the nation in February of 2023, up two places from the last report.

The report attributes these recent rental increase trends to the nation's rising inflation rate and unpredictable economy. Though unemployment is low (less than 3.4 percent), potential homebuyers are being sidelined with increasing interest rates. This is causing more competition among renters all over the country.

“Many markets continue to either normalize or correct following the steep increases in rent seen in 2021 [and 2022] in the zero interest rate [and] QE environment we went through,” said Zumper CEO Anthemos Georgiades in the report. “With interest rates expected to rise further in 2023, we anticipate continued deceleration in rent rises as new household formation freezes or is at least postponed.”

Much further down the list from Austin is San Antonio, coming in as the No. 66 most expensive rental market, which is a three-place increase from a previous report. Average rent for a one-bedroom apartment stayed relatively flat over the last month, at $1,160, yet is still 7.4 percent higher than it was last year. Two-bedroom apartments saw a smaller year-over-year increase at 4.4 percent, with the average rent price at $1,430.

Several cities in the DFW metro area also made the list, as well as Houston (No. 51) and El Paso (No. 95). Most notably, Irving (No. 34) is experiencing a nearly 15 percent year-over-year rent increase for both one- and two-bedroom apartments.

The nine total Texas cities that made the list include:

No. 25 – Austin
No. 34 – Irving
No. 36 – Dallas
No. 40 – Plano
No. 51 – Houston
No. 55 – Fort Worth
No. 66 – San Antonio
No. 67 – Arlington
No. 95 – El Paso

The full data from Zumper’s National Rent Report can be found at zumper.com.

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local real estate report

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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