The Dallas-Fort Worth metro can now lay claim to the title of highest rents among big cities in the state, a crown long held by Austin.
Since at least 2015, average rents in the Austin area have outpaced those in the three largest metros in Texas, which includes Dallas-Fort Worth, Houston and San Antonio. But according to data from three real estate firms, including Zillow, that began to change at the end of 2024.
While rents in the Dallas-Fort Worth area have been falling for the past year and a half, they have not been falling as quickly as prices in Austin. Austin is now one of the only cities in the country where rents are declining.
Real estate experts and economists attribute the drop in prices to a boom in apartment building.
“The new supply [of apartments] is just so great,” said Robin Davis, who has been analyzing local rental data for three decades as the owner of Austin Investor Interests.
Davis said she can't remember a time when landlords were offering such big concessions, the industry term for discounts means to entice renters to sign a lease, such as one month rent free. She has seen landlords offering as much as 2.5 months rent free, deals akin only to those she remembers seeing in 2009, during the national real estate market crash.
Experts have described what's happening in Austin now as more of a correction to the market than anything more dire. Between 2021 and 2023, average rents in the area rose 29% as tens of thousands of people who could work remotely flocked to Austin and those already here sought more space.
"Developers have been responding to a pretty significant demand for apartments immediately after the COVID shutdown," said Daniel Oney, research director at the Texas Real Estate Center at Texas A&M University. "People looking for more space, people relocating to Texas ... that stimulated a lot of construction."
No where more than in Central Texas.
In 2021, while cities in the Austin area began permitting new apartments at a record rate, other big cities in Texas lagged behind. Cities in the Austin metro permitted about 1,000 new apartments per every 100,000 residents compared to jurisdictions in Dallas-Fort Worth and San Antonio metros that permitted about a third of that.
That construction boom has since slowed, but thousands of new apartments are still opening. As a result, economists believe prices will continue falling through the year.
Local politicians have recently tried to capitalize on this building boom and resulting price drop by changing land use rules to let property owners build more in neighborhoods throughout the city.
At the same time, the incredible population growth that came to define Austin over the past couple of decades has slowed, according to census data. While the number of people living in the metro grew by nearly 4% from 2020 to 2021, annual population increases have fallen to around 2% in the years since.
Population growth has also slowed in the Dallas-Fort Worth metro, but not as quickly as in Austin. According to recent data from the Texas Demographic Center, Fort Worth has surpassed Austin to became the fourth-largest city in the state.
From 2022 through the middle of 2023, more people left Travis County, the county that includes Austin, than moved in. While the county’s population still increased, that uptick was led by births instead of people moving in for the first time in two decades.
Falling rents in Austin do not necessarily mean renters are having an easier time affording homes. Average rents are still about 10% higher than they were prior to the pandemic, according to numbers from MRI Apartment Data.
Late last year, researchers at Harvard University’s Joint Center for Housing Studies found that a larger share of renters in the Austin area are spending more than 30% of their income on rent, a standard measure for whether or not housing is affordable for someone.
Support for KUT's reporting on housing news comes from the Austin Community Foundation. Sponsors do not influence KUT's editorial decisions.
