What's Going on with Rental Leasing in Austin?

As of fall 2026, Austin rents are still falling: Apartment List’s October 2026 report put Austin’s median rent at $1,326, down 2.3 percent from a year earlier, compared with 0.4 percent nationally. The slide started in 2024, when Austin rents fell 7.3 percent in a year as the 2021 to 2022 boom cooled, driven by tech layoffs, people moving out, and mortgage rates high enough that fewer Austin residents could afford to buy.

Why was Austin so hot in 2021 and 2022?

Austin was one of the hottest landing spots during the 2021 to 2022 housing boom. A few reasons why:

1. Interest rates were low, so houses sold at inflated values.
2. Austin was becoming the new tech hub of the South.
3. Tesla had just built its Gigafactory 10 minutes away.

What changed?

By 2024, things had completely changed:

1. Massive layoffs in tech across the board, including 167,000 worldwide in Q3 2023 alone, hitting Austin’s tech scene hard.
2. Tesla laid off 2,700 workers in Austin.
3. Some people who moved here realized Texas is too hot.

Are people leaving Austin?

In 2024, Austin ranked 5th among cities people were moving out of.

Given that, you’d expect more houses to be selling as people relocate. That wasn’t the case. As of mid-2024, 15.9 percent fewer homes were selling than the year before, according to Redfin.

The trend has continued. In August 2026, City of Austin home sales were down 10.3 percent from a year earlier, and the median price was $560,000, down 4.3 percent, according to the Unlock MLS August 2026 Central Texas Housing Report.

Why aren’t more homes selling?

The reason is simple: buyers can’t afford to.

Interest rates in 2022 were under 3 percent. In 2024, they were pushing past 7 percent. After easing in 2025, the 30-year fixed rate was back above 7 percent in late September 2026, according to Freddie Mac.

For perspective, a $500,000 house with 20 percent down would have cost about $1,686 a month in principal and interest in 2022. At 7 percent it costs about $2,661 a month.

Put another way, the monthly payment on that $500,000 house in 2022 buys only about a $317,000 house at a 7 percent rate.

What’s the effect on rents?

Austin rental prices dropped faster than my New Year’s resolution in February. (There’s always next year.)

But seriously, the stats don’t lie. According to Apartment List, Austin’s median rent dropped 7.3 percent over the 12 months ending May 2024, compared with 2.9 percent for Texas and 0.8 percent nationally.

Source: Apartment List, May 2024.

Rents have kept sliding since, at a slower pace. Apartment List’s October 2026 report showed Austin’s median rent at $1,326 ($1,174 for a one-bedroom and $1,429 for a two-bedroom), down 2.3 percent year over year, compared with 2.1 percent for Texas and 0.4 percent nationally.

Is Austin still doing well?

Don’t get me wrong, Austin is doing just fine. It has many more residential and commercial developments in the works, but it has definitely come back down to earth after the surge of 2021 and 2022.

If you have commercial real estate needs in Austin, contact us.