Austin, TX Multifamily Market Report Q4 2025

In Q4 2025, Austin’s apartment market showed clearer signs of stabilization as vacancy pressures began to ease, even as rents remained under stress. The vacancy rate stood at 14.2%, reflecting improvement from earlier peaks as strong absorption of 3,000 units in the quarter started to better align with a slowing delivery pace. Despite this progress, owners continued to prioritize occupancy and aggressively competing for tenants, resulting in asking rents averaging $1,530 per unit and annual rent growth of -4.5%, the steepest decline among major U.S. markets. The combination of moderating supply, sustained demand, and a narrowing gap between deliveries and absorption suggests the market is moving past its worst imbalance, setting the stage for gradual improvement heading into 2026.

Key Findings

Austin is seeing demand outpace supply for the first time since 2021, driving a 150 bps year-over-year drop in vacancy to 14.2%, one of the sharpest improvements nationally.
After a record 2024, deliveries fell 46% in 2025 and could drop another 73% in 2026, setting up meaningful relief for operators and faster market rebalancing.
Rents are down 4.5% year-over-year (the steepest decline among major U.S. markets), but constrained development and steady absorption point to stabilization in 2026 and potential rent growth by 2027.

Austin Multifamily Supply & Demand Dynamics

Source: CoStar Group, Inc.

Austin Demographics

Source: CoStar Group, Inc.

Unemployment Rate: 3.5%
Current Population: 2,607,298
Households: 1,086,231
Median Household Income: $105,998

Austin’s economy continues to outperform nationally, underpinned by strong population growth, diversified employment, and sustained in-migration. The metro has reached 2.6 million residents, growing 1.8% year-over-year, the fastest pace among major U.S. metros, driven roughly equally by domestic and international migration. The region benefits from a business-friendly climate, a young and highly educated workforce, and its position as a lower-cost alternative to coastal tech hubs. Suburban expansion, particularly in Williamson County, continues to capture much of the growth, while large-scale investments such as Samsung’s semiconductor expansion are expected to support long-term economic momentum and keep Austin growing faster than the national average.

Population, Labor Force, & Income Growth

Source: CoStar Group, Inc.

Austin Multifamily Construction

Construction moved past its peak by Q4 2025, following one of the largest supply waves in the market’s history. Although 2,700 units were delivered during the quarter, strong leasing activity helped blunt the impact of new supply and signaled that demand is beginning to catch up. The construction pipeline continued to shrink, with 15,900 units under construction, reflecting a sharp pullback in new starts as higher financing costs, tighter underwriting, and elevated vacancy discouraged additional projects. While recent deliveries have left a lasting imprint, particularly in suburban and high-growth corridors, the slowdown in construction activity is reducing future supply pressure and supporting the market’s ongoing recovery.

Units Construction Starts

Source: CoStar Group, Inc.

Units Under Construction

Source: CoStar Group, Inc.

Austin Multifamily Sales

Investment activity remained cautious but showed early signs of renewed momentum as fundamentals began to stabilize. Elevated vacancy and declining rents continued to weigh on pricing, with stabilized yields near a 5.6% cap rate. Still, improving leasing conditions, supported by solid absorption relative to deliveries and a shrinking construction pipeline, helped narrow the bid-ask spread that had sidelined many buyers earlier in the cycle. Investors, particularly public REITs and active private buyers, focused on high-quality assets in fast-growing suburban submarkets, signaling confidence in Austin’s long-term demand drivers. With supply pressures easing and vacancy expected to trend lower, investor sentiment is gradually improving, setting the stage for stronger transaction activity as pricing stabilizes.