Austin, TX Multifamily Market Report Q3 2025

Austin’s multifamily fundamentals showed early signs of stabilization in Q3 2025, as strong leasing demand began to chip away at excess supply. The metro posted 5,700 units of absorption, outpacing 3,800 deliveries and pulling the vacancy rate down to 14.5%, its lowest level since early 2024. While asking rents fell 4.3% year-over-year, one of the steepest drops nationally, the lingering effects of oversupply and aggressive concessions still weigh on the market. However, concessions remain widespread, particularly in higher-end assets where vacancy has begun to tighten, in turn aiding occupancy. With absorption consistently ranking among the top three U.S. markets, Austin’s rent and vacancy trends indicate the market may have reached an inflection point, shifting from oversupply toward gradual stabilization.

Key Findings

Vacancies decreased by roughly 60 basis points since Q2 2025, paired with a 41% drop in quarterly deliveries, signaling the beginning of a long-awaited pullback in supply.
Rent fell 4.3% year-over-year, the sharpest decline among major U.S. markets, driving the average asking rent to $1.6K per unit.
Despite $205M in sales, well below pre-pandemic levels, the pause in upward cap rate movement suggests the market is reaching a valuation floor, setting the stage for renewed trading momentum as vacancies compress further.

Austin Multifamily Supply & Demand Demographics

Source: CoStar Group, Inc.

Austin Demographics

Source: CoStar Group, Inc.

Unemployment Rate: 3.5%
Current Population: 2,598,750
Households: 1,081,706
Median Household Income: $105,335

Austin’s economy remains resilient despite a cooling labor market, with job growth increasingly anchored by stable, non-cyclical sectors. Education, health services, and government now account for 40% of the 17,300 jobs added since August 2023, aiding offset softness in the tech industry, which decreased by 5% over the past year. The metro’s strong fundamentals, influenced by expansions from Samsung and Tesla, a business-friendly climate, and a deep talent pipeline from UT Austin, continue to attract employers and residents alike. With 1/4 of the population between 20 and 34, Austin’s young, educated workforce supports sustained economic and income growth, reinforcing its position as one of the nation’s fastest-growing and most dynamic metros.

Population, Labor Force, & Income Growth

Source: CoStar Group, Inc.

Austin National Accolades

Source: Opportunity Austin

3rd Highest Labor Force Participation
4th Highest Educational Attainment
7th In Startup Density

Austin Multifamily Construction

Construction activity in Q3 2025 continued to cool as Austin moved past the peak of its development cycle. Over the past 12 months, developers completed roughly 21,000 units, while quarterly deliveries fell to 3,800, marking a second consecutive slowdown and a broad pullback in starts. The construction pipeline now totals about 16,100 units, just over 4% of existing inventory. Elevated vacancies and normalized lending conditions have sidelined many projects, leading to the fewest new starts since 2011. As supply pressure finally eases, this slowdown is aiding in the rebalance of fundamentals and setting the stage for a gradual market recovery.

Units Construction Starts

Source: CoStar Group, Inc.

Units Under Construction

Source: CoStar Group, Inc.

Austin Multifamily Sales

The sales market showed signs of growth in Q3 2025 driven by loan maturities and workouts. Velocity ticked upwards but still remains below pre-pandemic levels, with most buyers seeking to capitalize on dislocated pricing. Quarterly sales volume reached roughly $205 million, with pricing averaging $224,000 per unit and cap rates holding steady around 5.5%, suggesting investors believe the market may be nearing a floor. Most transactions were focused on Class A assets in northern suburbs like Round Rock and Georgetown, where population growth and long-term fundamentals continue to attract institutional capital. With the supply pipeline tightening and performance metrics showing resilience, confidence is increasing in Austin’s multifamily market.