The rental market in tech hubs, including the five-county Austin metro, is climbing back up to pre-pandemic levels.
The U.S. median April rent was $1,483, up 2.7% year-over-year and the most marked increase since March 2020, according to a monthly report from Realtor.com. Rents in tech hubs, where prices fell dramatically due to remote work, are also on the rebound. Although they were still down 5.4% year-over-year in April, they are still up from the 6.6% decline recorded in February.
Austin is among the metros leading this charge. The median April rent in U.S. tech hubs was up $2,086, up 1.1% from March. In Austin, rent was up 1.7% year-over-year, second only to Denver. Other hubs, including San Jose and San Francisco, in California, are still posting double-digit declines.
“In tech centers, rent declines are getting smaller, signaling they are on the path to turnaround,” Realtor.com Chief Economist Danielle Hale said in a statement. “If the trend continues, renters could expect to be paying pre-pandemic rates by as early as this fall.”
The work-from-home migration led many renters and prospective homebuyers to prioritize more space. The desire has been reflecting in home listing prices here in Austin as well as in rents for larger units across the country, according to the Realtor.com report. The median April rent for two-bedroom units across the U.S. was $1,662, up 5.2% year-over-year and surpassing their pre-COVID growth rates. The median April rent for studios, on the other hand, was down 1.9% over the same period.
This represents a notable change from earlier in the pandemic when the local housing market was scorching hot but area rents remained depressed.
Bruce McClenny, president of ApartmentData.com, attributed Austin’s recent rental market recovery to a combination of factors: job growth powered by companies such as Tesla, Oracle and Samsung; relocations; and an increasingly pricey housing market. “Austin’s home market is probably hotter than ever,” he recently told Austonia. “That has to play into the rental market right now.