Austin is among the cheapest rental cities in the US — but that might soon change. Here's why it's about to get pricey

People crowd Sixth Street in Austin, Texas, March 15, 2019.

Austin prides itself on being the “Live Music Capital of the World,” but residents of the Texas capital could find themselves singing the rent-hike blues if predictions from some real estate analysts hold true.

Currently, Austin’s rental landscape sounds like a dream. Realtor.com, for one, crowed about the city’s 33 consecutive months of rent price drops as of January (1), while Zillow put the average rental price of a one-bedroom apartment at $1,272 — down $78 year-over-year and 15% below the national average as of March (2).

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Such low rents may be partly credited to the city’s 10-year plan to construct 135,000 housing units, including 60,000 affordable units, starting in 2018. A surge of new residents during the pandemic also spurred development, reports The Wall Street Journal, as waves of white-collar workers arrived seeking more favorable tax laws and a low cost of living (3).

But the rental supply is beginning to run dry. According to The Journal, citing data from real estate info firm CoStar, fewer than 9,000 new apartment units are expected in Austin this year — roughly half of last year’s total and 72% lower than the 2024 peak. Housing demand, however, appears stable.

“We’re starting to turn a corner,” Platte Canyon Capital co-founder Brennen Degner told the publication in an article published Feb. 24. “Next, you’ll start to see rents pick up, you’ll start to see concessions burn off.”

Bursting Austin’s bubble

Analysts predict rents in Austin will remain flat in 2026 or possibly increase, reports The Journal. One local renter, Jeremy Homol, said the rental perks he previously enjoyed had evaporated, and that “a lot less builders are coming to town.”

“There’s not these insane new apartment complexes becoming available every other day,” he told the news outlet.

Meanwhile, a January report from real estate firm Matthews found that Austin’s residential market “is seeing demand outpace supply for the first time since 2021” while forecasting that “the combination of moderating supply, sustained demand and a narrowing gap between deliveries and absorption suggests the market is moving past its worst imbalance” (4) The same report also predicts “potential rent growth by 2027.”

A change in rents is one thing, but housing affordability is a separate issue for many. A local report by Fox 7 Austin, citing government data, noted the median family income in the Austin metro area was $133,800 in fiscal year 2025, up nearly 40% since 2019 (5). That increase is largely attributed to a growth in high-paying workers, and has had an impact on affordable housing.

“As rents have gone down, we have seen less of an impact on affordability in affordable housing, because a lot of affordable housing ties rent limits to the area median income,” Shoshana Krieger, project director for Building and Strengthening Tenant Action, told the broadcaster.

Avoiding the affordability illusion

There may still be time for those interested to get in on Austin’s lower-than-average rental market, but it’s key to remain aware of the mirage of affordability. After all, nobody wants to move across the country only to find their new home is not what they expected.

It’s an issue that’s given rise to a new breed of relocators known as “half backs” — those who move from northern states to warmer southern ones, only to move “halfway” back north again due to issues such as affordability.

“There are a wide range of reasons why seniors are moving ‘half back’ home,” senior living writer Alissa Sauer told National Mortgage Professional (6). “Mid-South states still offer the weather that draws seniors to more traditional retirement states, but often without the crowds and the cost.”

Florida is an example. A snowbird haven, many who live in expensive northern cities flock to the Sunshine State to live, work or simply enjoy their golden years.

Many then discover, for example, that Florida is suffering from a homeowner’s insurance crisis, with premiums being driven up by climate events like flooding and hurricanes. Some providers have even abandoned the state altogether. Bankrate ranks Florida as the third-most expensive state for homeowners insurance in the U.S. with an average annual premium of $5,838 for a $300,000 dwelling, compared to the national average of $2,424 (7).

Florida isn’t alone as a “half back” state, but it does offer a cautionary tale about the illusion of affordability and the importance of taking all expenses into account before moving all the way across the country and then back again.

Austin is among the cheapest rental cities in the US — but that might soon change. Here’s why it’s about to get pricey

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