The average Austin rent is steadily increasing after a months-long pandemic slump, largely due to prospective homebuyers who have been exhausted by the frenzied local housing market and turned to apartments.
After a nine-month pandemic downturn, the average rent in the Austin metro began to creep up in December. It is now $1,442 a month, up from $1,278 in July 2020 and $1,311 in July 2019, according to the latest market report from AparrtmentData.com. The occupancy rate is 91.4%, up from 89.3% last year, and only 20% of units are rented with concessions, such as one-month-free specials and other discounts, compared to 26% in June and 44% this time last year.
“The housing market is taking what used to be residential homeowners who can’t find homes now and turning them into apartment renters,” ApartmentData.com Vice President of Sales and Development Cindi Reed said.
The median home price in the city of Austin reached an all-time high of $566,500 in May, increasing $142,450 year-over-year, according to the Austin Board of Realtors latest market report. Low supply, high demand, labor shortages and rising construction costs are all contributing to the rising sales prices.
Many prospective homebuyers are being priced out of the brutal housing—and turning to the rental market instead. Deanna Garza, a Realty Austin agent, said people relocating to Austin for jobs at companies such as Tesla and Apple may also wish to rent before buying. These trends have led to more competition. The average rent in the Austin metro is more expensive—and rising more rapidly—than in other big Texas cities, despite a brief pandemic slump that offered tenants rare relief in an increasingly expensive market, according to ApartmentData.com.