Q2 2025 Austin Multifamily Market Report

Highlights

• Austin is making a comeback from its oversupply, recording increased absorption levels throughout the first half of the year.
• Demand is highest for Class A properties, which accounted for 85% of units absorbed over the past year. This totals 20,000 units.
• The metro’s economy is boosted by its younger demographic, which has attracted various tech companies and driven population growth.

 

Austin Demographics

• Unemployment Rate: 3.4%
• Households: 1,088,529
• Current Population: 2,591,647
• Median Household Income: $102,523

 

Austin’s employment sector continues to be aided by the education, health services, and government segment, which accounted for 40% of the 17,300 jobs added since August 2023. The education and heath services sector is especially important as it makes up 12% of the metro’s overall employment. One of the most notable employers is the University of Texas at Austin, which boasts over 23,000 employees.

 

Austin Multifamily Market Performance

Austin’s multifamily sector recorded a strong start to 2025, with positive absorption levels in both quarters. Specifically for the second quarter, the metro recorded a total 6,565 units absorbed, which surpassed the first quarter’s level. This trend is especially important as Austin faced an imbalance between supply and demand since the first quarter of 2021. Moving forward, the metro is expected to record 15,000 units absorbed by year-end.

 

To make up for the supply-demand imbalance, rents declined by -3.8% over the past year, which is the sharpest decline nationally. Austin’s suburbs note the greatest declines with some noting decreased rent growth of -5.5%. The urban areas record positive rent levels, with Downtown Austin recording an annual rent increase of 2.8% this quarter. As vacancy continues to decrease, rent growth is forecast to stabilize by early 2026.

 

By the Numbers

• Sales Volume: $140M
• Vacancy Rate: 15.1%
• Rent Growth: -4.3%
• Units Delivered: 6.5K
• Units Absorbed: 6.6K| Q2 2025 | Source: CoStar Group, Inc.

 

Austin Supply and Demand Dynamics

Source: CoStar Group, Inc.

 

Under Construction

Source: CoStar Group, Inc.

New projects are decreasing across the metro, with 18,278 units under construction in the second quarter. However, areas forecast to see an increase in supply include, Northeast, Southeast, and Downtown Austin. These locations account for nearly half of higher-tier units under construction. The new additions will continue affecting the supply pressure being felt in the Class A sector as 85% of all units delivered in the past year were for this segment.

 

Sales

Trades in Austin are increasing by 18% year-over-year. Class A properties note one of the greatest upticks, growing by 63%. Sales for these apartments often occur in the Round Rock, Leander, and Georgetown submarkets. In these areas, cap rates for Class A properties are about 5%, with per-unit pricing below $200,000; meanwhile, Class B apartments record sale prices of $170,000 per unit. Moving forward, cap rates are expected to stabilize as market fundamentals improve.

 

Austin Multifamily Quarterly Sales Volume & Sales Price per Unit

Source: CoStar Group, Inc.

 

Submarket Highlights

Source: CoStar Group, Inc.

 

Submarket	Market Asking Rent per Unit	Market Asking Rent Growth	12-Month Units Absorbed
Northeast Austin	$1,444	-5.7%
Central Austin	$1,700	2.0%
Downtown Austin	$3,467	3.2%
Georgetown-Leander	$1,573	-6.4%
San Marcos	$1,309	-4.0%