Austin Multifamily Market Update

Austin Multifamily Market Update – Summer 2025

Market Overview
Austin continues to navigate a massive supply wave. Following a record 31,000 new units delivered in 2024, metro-wide occupancy has cooled to the low‑92% range, with overall vacancy (including new lease‑ups) hovering around 14–15%—among the highest in the U.S.

Cap Rates & Sales
Cap rates have edged slightly higher. Locally, stabilized rates are in the mid‑5% range, up from the sub‑4% levels seen during the 2021–22 boom. Meanwhile, Q1 2025 transaction volume reached ~$185M, modestly up from late‑2024 lows.

Rent Trends & Concessions

• Rents have declined ~4–5% YoY, with some submarkets seeing 17%+ dips from 2022 peaks 
• Landlords across the board are offering free months and incentives, especially at Class A properties 

Supply Pipeline
New deliveries are slowing. After the 2024 surge, only 12,000–13,000 units are expected in 2025—a 60–65% slowdown—though 20,000+ units remain under construction 

Leasing & Absorption

• Q1 absorption (~4,800 units) outpaced deliveries (~3,600 units), signaling improved leasing momentum 
• New sustainable “green” properties are leasing ~30% faster than traditional assets 

Macroeconomic Context

• Interest rates remain elevated (~5–6%), keeping financing costs high and underwriting conservative 
• Renters nationwide are staying in rentals longer due to high home borrowing costs, supporting underlying demand even as local supply overwhelms the market 

Summary Takeaways

• Market type: Renter’s market with elevated vacancies and rent concessions
• Cap rates: Stabilizing around 5–6%, offering better yield for buyers
• Supply outlook: Massive 2024 deliveries behind us; 2025 trimming encourages balance
• Leasing trends: Improved absorption, with prime assets leading the recovery
• Outlook: Late‑2025 may bring stabilization; 2026 could see a modest rent rebound