Austin Multifamily Vacancy Drops 289 Basis Points as Supply Wave Breaks

Austin built more apartments, faster, than almost any market in the country — and in the second quarter of 2026 the correction it triggered finally turned. Vacancy fell 289 basis points year-over-year to 12.29%, one of the sharpest improvements of any major U.S. multifamily market and a clear break from the 15.78% peak set in the third quarter of 2024, when Austin held the highest apartment vacancy rate in the nation. Effective rent slipped to $1,414, down 3.88% year-over-year, but that decline is roughly half the -7.37% recorded a year earlier. The reason is supply: quarterly completions fell 56.4% year-over-year, trailing 12-month deliveries dropped 51.5% to 12,737 units, and the construction pipeline has shrunk to 4.55% of inventory from a 19.67% peak in early 2023. Capital has already noticed — Austin investment volume nearly tripled year-over-year in Q2.

 

Key Findings

• Vacancy posted one of the largest improvements in the country: Austin multifamily vacancy fell 289 basis points year-over-year to 12.29% in Q2 2026, down from a 15.78% peak in Q3 2024 — at the time the highest vacancy rate of any major U.S. market.
• Rent declines are decelerating sharply: Effective rent reached $1,414, down 3.88% year-over-year, compared with a -7.37% reading a year ago. Rent growth has improved in each of the last three quarters.
• The supply pullback is the steepest in the country: Q2 completions fell 56.4% year-over-year to 2,898 units and trailing 12-month completions dropped 51.5% to 12,737 units, down from a 2024 peak of 32,089 units delivered in a single year.
• The forward pipeline has effectively normalized: Units under construction now equal 4.55% of inventory, versus 19.67% in Q1 2023 — a point at which nearly one in five apartments in the market was being built simultaneously.
• Demand is steady, not spiking: Net absorption totaled 6,306 units in Q2, essentially flat against 6,441 a year ago, while occupied stock rose 7.4% year-over-year. Austin is leasing well; the constraint is the size of the standing vacant inventory still working down.
• Investment volume nearly tripled: Q2 sales volume reached $557.5M, up roughly 194% year-over-year, and trailing 12-month volume climbed 49.0% to $3.7B.
• Pricing has not caught up to the fundamentals: Price per unit sits at $206,104, roughly 18.0% below the 2022 peak of $251,323, while cap rates have expanded for 17 consecutive quarters to 5.41%.
• Class A carries almost the entire remaining pipeline: Of 14,610 units under construction, 10,596 — roughly 72% — are Class A. Class A vacancy is 12.0% at an asking rent of $1,741.

 

Austin Multifamily Market Overview

Austin closed the second quarter of 2026 with multifamily vacancy at 12.29%, down 289 basis points from a year earlier. That is a large move by any standard, and it comes off a genuine peak: vacancy topped out at 15.78% in Q3 2024 after several years in which construction ran well ahead of demand.

The demand side of the ledger has been consistent rather than dramatic. Net absorption of 6,306 units in Q2 2026 was roughly flat against the 6,441 units absorbed a year ago, and occupied stock grew 7.4% year-over-year. Austin has been absorbing apartments at a healthy clip throughout the downturn. What changed this quarter was not a surge in leasing — it was the volume of new product arriving to compete with it.

 

Austin Multifamily Rents

Effective rent in Austin measured $1,414 in Q2 2026, down 3.88% year-over-year. The headline is still negative, but the trajectory matters more than the level: the same measure read -7.37% a year ago, -6.85% in Q4 2025, and -7.03% in Q1 2026. Rent declines have compressed by roughly half in twelve months, and the improvement accelerated notably this quarter.

Rent Growth by Submarket

Only three Austin submarkets posted positive rent growth in Q2 2026, and the leaders sit at opposite ends of the metro. Caldwell County led at +1.7% year-over-year, followed by Lake Travis at +1.5% and Downtown Austin at +0.1%. Central Austin was effectively flat at -0.2%, with Round Rock (-2.2%) and East Austin (-2.4%) rounding out the strongest performers.

The steepest declines cluster in the metro’s outer ring and in submarkets still delivering product. Hill Country fell 13.8% year-over-year, Far West Austin dropped 11.8%, and Buda-Kyle declined 8.9%. San Marcos (-6.7%), Southeast Austin (-6.5%), and Far North Austin (-6.2%) also lagged the market.

 

Austin Multifamily Vacancy

Vacancy Rate

Austin’s multifamily vacancy rate was 12.29% in Q2 2026, down 289 basis points year-over-year and down 112 basis points from 13.41% in Q1 2026. The market has now improved for four consecutive quarters off its Q3 2024 peak of 15.78%.

At 12.29%, Austin remains one of the higher-vacancy major markets in the country — this is a market in recovery, not a recovered one. But the pace of improvement is what distinguishes it, and the supply data explains why the trend should continue.

Vacancy by Submarket

The core of the metro is meaningfully tighter than the metro average. West Austin posted the lowest vacancy at 5.6%, followed by Central Austin (8.3%), Lake Travis (8.5%), and South Central Austin and Southwest Austin (both 9.3%). Northwest Austin (9.4%), Far West Austin (9.5%), Round Rock (9.7%), and Cedar Park (10.2%) all sit comfortably below the metro figure.

Vacancy is concentrated at the metro edge, where most of the construction landed. Hill Country (25.5%), Far North Austin (25.0%), Caldwell County (23.8%), Bastrop County (20.3%), and San Marcos (19.9%) carried the highest vacancy in Q2 2026. Northeast Austin (17.0%) and Southeast Austin (16.2%) also remain elevated — and both still have significant product under construction.

 

Austin Multifamily Construction

Units Delivered and Under Construction

Austin’s construction cycle was larger than it first appeared, and its reversal has been correspondingly abrupt. Completions peaked at 32,089 units in 2024 alone. In Q2 2026, deliveries totaled 2,898 units — down 56.4% year-over-year. Trailing 12-month completions fell 51.5% to 12,737 units.

The forward pipeline tells the clearer story. Units under construction now represent 4.55% of total inventory, down from 19.67% in Q1 2023, when nearly one in five apartments in the entire Austin market was under construction at the same time. That is the fastest and steepest supply pullback of any major market in this cycle, and it is the direct cause of the vacancy improvement now showing up in the demand data.

Construction by Submarket

What remains under construction is concentrated in a handful of submarkets on the eastern and southern sides of the metro. East Austin leads at 14.4% of inventory under construction, followed by Northeast Austin (12.4%), Southeast Austin (9.5%), Downtown Austin (8.4%), and Midtown Austin (8.3%). Southwest Austin and West Austin follow at 7.7% each.

Ten of Austin’s 25 submarkets now have zero units under construction — including Cedar Park, Central Austin, Far West Austin, Hill Country, Lake Travis, Pflugerville, Riverside, Round Rock, Bastrop County, and Caldwell County. For submarkets like Hill Country and Caldwell County, which carry the highest vacancy in the metro, an empty pipeline is the mechanism by which those rates come down.

 

Austin Multifamily Fundamentals by Class

The remaining construction is overwhelmingly concentrated at the top of the market. Of the 14,610 units under construction in Austin, 10,596 are Class A — roughly 72% of the pipeline — against 3,639 Class B units and just 375 Class C units.

• Class A: 12.0% vacancy | $1,741 asking rent | +1,319 units of inventory change | 10,596 units under construction
• Class B: 12.7% vacancy | $1,331 asking rent | +369 units of inventory change | 3,639 units under construction
• Class C: 12.3% vacancy | $1,129 asking rent | no inventory change | 375 units under construction

Vacancy is remarkably uniform across classes — 12.0% for Class A, 12.7% for Class B, and 12.3% for Class C — which tells you Austin’s oversupply is not a luxury-product problem that has left the rest of the market untouched. It has compressed the entire rent ladder. Class C added no inventory at all this quarter and has effectively no pipeline, meaning workforce housing in Austin faces no new competing supply while the top of the market still has 10,596 units to deliver and lease.

 

Austin Multifamily Investment Market

Sales Volume and Pricing

Capital is moving back into Austin quickly. Q2 2026 investment volume reached $557.5M, up roughly 194% — nearly triple — from the same quarter a year ago. Trailing 12-month volume climbed 49.0% to $3.7B, though that remains well below the series peak of $10.9B set in 2021.

Pricing, however, is still catching up. Price per unit stands at $206,104, approximately 18.0% below the 2022 peak of $251,323, and the average cap rate has now expanded for 17 consecutive quarters to 5.41%. The pattern is worth sitting with: volume is accelerating sharply while pricing continues to soften. Buyers are moving ahead of full confirmation that Austin’s rent decline and vacancy overhang have resolved — betting on a supply story that the fundamentals data is now actively confirming, but underwriting it at a repriced basis. Explore Matthews multifamily investment sales services for a deeper look at how these assets are trading.

Who Is Buying

Institutional capital has dominated Austin multifamily over the past five years, accounting for 46% of sales volume. Private buyers made up 31%, users 12%, and REIT/public buyers 10%, with private equity representing less than 1%.

 

What This Means for Austin Multifamily Investors

Austin is the clearest supply-driven recovery story in the country right now, and the gap between its fundamentals and its pricing is the opportunity. Vacancy has fallen 289 basis points in a year, rent declines have halved, and the pipeline that caused the oversupply has contracted from 19.67% of inventory to 4.55%. Deliveries will keep falling through 2026 and 2027 simply because the construction starts are not there.

The risk is timing, not direction. At 12.29% vacancy and -3.88% rent growth, Austin has not yet returned to positive rent territory, and the standing vacant inventory will take several more quarters to lease. Price per unit is 18% below peak and cap rates have expanded for 17 straight quarters, which means the market is still being repriced even as its fundamentals improve.

Two patterns in this quarter’s data are the most actionable. First, the submarket split: West Austin, Central Austin, and Lake Travis offer low vacancy, positive-to-flat rent growth, and — in the case of Central Austin and Lake Travis — no competing construction at all. The eastern and southeastern submarkets carry both the remaining pipeline and the near-term lease-up risk, but also the widest spread between current pricing and stabilized fundamentals.

Second, the class split. With 72% of the remaining pipeline in Class A and effectively none in Class C, the competitive supply picture over the next 18 months is very different at the top of the market than at the bottom. Class C inventory did not grow at all this quarter and has 375 units under construction metro-wide — a supply setup that argues for workforce and value-add product where the new-delivery risk has already cleared. Compare this quarter against the Austin, TX Multifamily Market Report Q1 2026 to see how quickly the trend turned.

 

Austin Multifamily by the Numbers

Q2 2026 | Sources: Matthews™ Research, CoStar, BLS

• Vacancy Rate: 12.29% (-289 bps YoY; peak 15.78% in Q3 2024)
• Average Effective Rent: $1,414
• Rent Growth: -3.88% YoY (vs. -7.37% a year ago)
• Net Absorption: 6,306 units (vs. 6,441 a year ago)
• Occupied Stock: +7.4% YoY
• Q2 Completions: 2,898 units (-56.4% YoY)
• Completions (TTM): 12,737 units (-51.5% YoY)
• Peak Annual Completions: 32,089 units (2024)
• Units Under Construction: 14,610 units (4.55% of inventory, vs. 19.67% peak in Q1 2023)
• Q2 2026 Sales Volume: $557.5M (+194% YoY)
• Sales Volume (TTM): $3.7B (+49.0% YoY; series peak $10.9B in 2021)
• Average Cap Rate: 5.41% (17 consecutive quarters of expansion)
• Price Per Unit: $206,104 (-18.0% from the 2022 peak of $251,323)
• Buyer Composition (5-yr): 46% institutional, 31% private, 12% user, 10% REIT/public, <1% private equity

 

Frequently Asked Questions

What is the multifamily vacancy rate in Austin?

The Austin multifamily vacancy rate was 12.29% in Q2 2026, down 289 basis points year-over-year and down from 13.41% in Q1 2026. Vacancy peaked at 15.78% in Q3 2024, which at the time was the highest reading of any major U.S. market.

What is the average apartment rent in Austin?

Average effective apartment rent in Austin was $1,414 in Q2 2026, down 3.88% year-over-year. That decline is roughly half the -7.37% reading recorded a year earlier, marking a significant deceleration.

Is Austin still overbuilt with apartments?

Much less than it was. Units under construction have fallen to 14,610 units, or 4.55% of total inventory, as of Q2 2026 — down from 19.67% in Q1 2023. Trailing 12-month completions dropped 51.5% to 12,737 units, versus a 2024 peak of 32,089 units delivered in a single year. Ten of Austin’s 25 submarkets now have no units under construction.

Is Austin’s remaining apartment construction Class A or workforce housing?

Almost entirely Class A. Of the 14,610 Austin apartment units under construction in Q2 2026, 10,596 are Class A, 3,639 are Class B, and only 375 are Class C. Class C inventory did not grow at all during the quarter.

What are Austin multifamily cap rates in 2026?

The average Austin multifamily cap rate was 5.41% in Q2 2026, the 17th consecutive quarter of cap rate expansion. Average price per unit was $206,104, roughly 18.0% below the 2022 peak of $251,323.

Which Austin submarkets have the strongest rent growth?

Caldwell County led Austin submarkets with +1.7% year-over-year rent growth in Q2 2026, followed by Lake Travis (+1.5%) and Downtown Austin (+0.1%). Central Austin was nearly flat at -0.2%, with Round Rock (-2.2%) and East Austin (-2.4%) also outperforming the metro.

Which Austin submarkets have the lowest vacancy?

West Austin had the lowest multifamily vacancy in Q2 2026 at 5.6%, followed by Central Austin (8.3%), Lake Travis (8.5%), and South Central Austin and Southwest Austin (both 9.3%).

How much did Austin multifamily investment volume grow in Q2 2026?

Austin multifamily investment volume reached $557.5M in Q2 2026, up approximately 194% — nearly triple — year-over-year. Trailing 12-month volume rose 49.0% to $3.7B, still well below the 2021 series peak of $10.9B.

How many apartment units were absorbed in Austin in Q2 2026?

Austin recorded 6,306 units of net absorption in Q2 2026, roughly flat against 6,441 units a year earlier, and more than double the 2,898 units delivered during the quarter.

 

For more quarterly market data across property types and markets, visit Matthews™ Insights.