Did America’s biggest rental bubble just pop?
One of America’s hottest pandemic boomtowns is coming back down to earth, as apartment rents in Austin have fully unwound their Covid-era gains, signaling a cooling phase for one of the Sun Belt’s most overheated housing markets.
According to data from Reventure Consulting, average rent in Austin, Texas, has fallen 21% from its mid-2022 peak, dropping to $1,288 per month from $1,636.
Nick Gerli, founder and CEO of Reventure Consulting, noted that the pullback has become pronounced enough that some two-bedroom apartments are now leasing for under $1,000 per month.
The correction reflects a sharp slowdown in inbound migration alongside a wave of new apartment supply, much of it approved and financed during the height of the pandemic housing boom.
“At this point, Austin has its cheapest rents on record relative to income,” Gerli said.
Austin TX is now back to pre-pandemic apartment rents.
undefined Nick Gerli (@nickgerli1) January 1, 2026
Down 21% from peak in summer of 2022.
$1,636/month --> $1,288/month
(I'm now even seeing 2BRs in some apartments at sub-$1,000)
This rental correction is due to a sharp drop in migration/demand, combined with a surge of… pic.twitter.com/H69ilC4A9T
The shift is striking given Austin’s role as a poster child for pandemic-era rental inflation. The city experienced rapid population growth as remote workers and tech employees flocked to Texas in search of lower taxes and a lower cost of living.
That influx strained housing supply, pushed rents sharply higher, and contributed to a broader affordability crunch — one that is now easing as demand cools and supply catches up.
Not just an Austin phenomenon
Austin’s sharp rent decline is part of a broader national cooling trend that began to emerge in late 2024.
In October, InvestorsObserver reported that several former rental hotspots, including markets in Texas, Florida, Colorado, California, and Arizona, were already posting steep declines from their 2022 peaks.
The trend intensified toward the end of 2025, with the national average rent falling further to about $1,367, according to data from Apartment List.
CoStar data show that rent declines during the fall were the steepest the firm has recorded in its 15 years of tracking.
While the pullback has coincided with record-high vacancy rates — driven in part by a surge in multifamily construction — CoStar said shifting household formation trends are also playing a role.
Grant Montgomery, a senior analyst at CoStar, noted that a growing share of young adults are opting to live with family rather than rent on their own.
Within the 18-to-34 age group, roughly 32.5% are now living with parents, the highest level in years, Montgomery told CNBC.
“I think it reflects high rental costs that have risen over the years, as well as the tougher job market for young folks just coming out of college,” he said.