Austin Apartment Market Update: Vacancy Near Highs as Rents Fall

Austin Apartment Market Update: Vacancy Near Cycle Highs as Rents Continue to Reset

The Austin apartment market is sending a clear and consistent signal as 2026 begins. Supply remains elevated, vacancy is still near cycle highs, and rents continue to grind lower despite modest month-to-month fluctuations. With more than 38,000 apartments currently available for rent across the Austin metro, the balance of power remains firmly tilted toward renters, not landlords. This dynamic is not driven by sentiment or short-term noise but by measurable oversupply relative to demand.

As of January 2026, average two-bedroom apartment rents in the Austin–Round Rock–Georgetown metro sit at $1,341. That places rents down 22.3 percent from the August 2022 cycle peak of $1,726. While the pace of decline has slowed compared to the sharp correction seen through 2023 and early 2024, pricing pressure has not reversed. Rents are still moving lower because vacancy remains structurally high.

Vacancy across the metro stands at 9.67 percent in January 2026. That represents a 144 percent increase from the cycle low of 3.96 percent recorded in September 2021. Even after a slight month-over-month dip from December, vacancy remains near the highest level observed in the current cycle. Historically, the Austin apartment market tends to stabilize when vacancy falls closer to the mid-7 percent range. At nearly 10 percent, the market remains oversupplied.

The historical relationship between rent and vacancy in Austin has been remarkably consistent over time. When vacancy compressed sharply between 2020 and 2021, rents accelerated rapidly. When vacancy began rising in late 2022 and throughout 2023, rent growth stalled and then reversed. The current configuration mirrors prior late-cycle corrections, where vacancy peaks first and rents lag before stabilizing. That stabilization phase has not yet occurred.

A critical data point reinforcing this imbalance is current availability. Apartments.com is reporting 38,405 active rentals available in Austin today. This is not a theoretical supply number or a construction pipeline estimate. It represents units actively competing for tenants right now. Elevated active availability directly translates into increased concessions, longer lease-up periods, and continued downward pressure on effective rents, even if asking rents appear sticky on the surface.

From a cycle perspective, the Austin apartment market is no longer in free fall, but it is not in recovery either. The data supports a late-stage correction environment. Vacancy remains too high to allow sustained rent growth, while rents remain above long-term pre-pandemic norms when adjusted for inflation and historical vacancy bands. Until vacancy moves materially lower and stays there, rent growth will remain mathematically constrained.

This matters beyond the rental market itself. Apartment performance influences investor underwriting, valuation models, and the broader Austin real estate market. High vacancy and declining rents pressure multifamily valuations, slow new development starts, and reduce investor appetite for aggressive pricing. Over time, these same forces tend to ripple into the for-sale housing market by dampening investor demand and limiting rent-based justification for higher home prices.

In practical terms, renters remain in a strong negotiating position entering 2026. Landlords are still competing for tenants, not the other way around. For investors and developers, the data argues for caution, patience, and conservative assumptions. The Austin apartment market is working through excess supply, and history suggests that process takes time.

The numbers are not ambiguous. Vacancy near 10 percent, rents down more than 22 percent from peak, and over 38,000 available units point to a market still searching for equilibrium. Any narrative suggesting a meaningful rebound must first be confirmed by sustained vacancy compression. That has not yet happened.

Austin Apartment Market FAQ

Are Austin apartment rents expected to rise in 2026?

Based on current vacancy levels, sustained rent growth in 2026 appears unlikely. Vacancy remains near 9.67 percent, which historically limits pricing power for landlords. Until vacancy moves closer to long-term equilibrium levels, rent increases are likely to remain muted or inconsistent.

Why are there so many apartments available in Austin right now?

Austin experienced a large wave of multifamily construction following the 2020–2022 demand surge. As those units delivered into slowing demand, availability rose. The current count of 38,405 rentals available reflects active competition among landlords rather than temporary seasonal noise.

How does vacancy impact Austin apartment rents?

Vacancy and rent move inversely over the cycle. When vacancy falls, landlords gain leverage and rents rise. When vacancy rises, tenants gain leverage and rents decline. The current vacancy rate near cycle highs explains why rents continue to trend lower despite slower declines.

Is the Austin apartment market oversupplied?

Yes. Vacancy near 10 percent combined with elevated active listings indicates oversupply relative to current demand. This does not mean demand is weak, but supply remains too high for the market to rebalance quickly.

How does the apartment market affect Austin home prices?

Apartment market conditions influence investor behavior and affordability dynamics. When rents fall and vacancy rises, investor demand for housing often weakens, which can indirectly pressure home prices and slow overall market momentum.