Jay Janner

Austin was one of the top three U.S. metros that saw the most significant rent declines in November, a new report says, and some experts believe the trend could continue into next year.

Austin experienced a 5.4% decrease year over year, with a median asking rent of $1,575. That's according to Realtor.com’s recently released November Rental Report. The other two metros that had the most significant rent declines were Orlando, Fla., (down 6%) and Dallas (down 4.1%).

In mid-November, Orphe Divounguy, a senior economist at Zillow, said the Austin housing market has cooled down due to the construction boom and declining housing affordability in the past year.

"As the vacancy rate rises, the growth of rent (and home values) is anticipated to decline," Divounguy told the Statesman. Commenting at that time on Zillow's October rent data, Divounguy said that although it showed that the typical rent in Austin was still up about 25% compared with the same month in 2019, "the slowdown in rent growth is seen as a welcome breather for renters — and prospective homebuyers — in the Austin market," he said.

Earlier this year, local housing experts predicted that 2023 would bring some relief for renters due to slower job growth — mainly in the tech sector — and a tide of new apartment supply that was expected to exceed demand. Previously, rents hit record highs in 2022, with some tenants seeing their monthly rates balloon by a few hundred dollars.

Here's what Hannah Jones, senior economic research analyst with Realtor.com, had to say about the outlook for the Austin metro area:

What's in store for Austin's rent market in 2024?

  • Austin saw a more substantial rent decline than was typical nationally in November. Rents fell 5.4% in Austin in November versus a 0.6% drop nationally. We expect this trend to continue as the uptick in multifamily construction makes its way through the market. 

Why are we seeing rents decline?

  • Multifamily (new construction) completions, the vast majority of which are used for rentals, picked up 16.1% year over year in the Austin metro area year to date (January-October). The level of multifamily completions in Austin is more than double the pre-pandemic (2019) level. The significant influx in rental supply takes pressure off of rents despite still-high demand. 

Any additional insights?

  • We expect rents to continue to soften at a national level next year as more multifamily construction is completed. As home prices and mortgage rates remain elevated, the rental market offers prospective buyers a more affordable option in many areas, including Austin."

Source: Austin American-Statesman

Written by: Shonda Novak

Published: January 3, 2024

Posted by Grossman & Jones Group on


Email Send a link to post via Email

Leave A Comment

e.g. yourwebsitename.com
Please note that your email address is kept private upon posting.