Rising rates have turned scores of would-be homebuyers into renters across the country, but nowhere is that more true than in Austin.
The median monthly payment for buyers of small homes is more than double that of renters in the Texas capital, according to a new report from Realtor.com.
Among the 50 largest metros in the country, Austin tops the list for places where it is cheaper to rent than buy.
Austin’s median monthly rent works out to $1,659, while the monthly cost for entry-level buyers was $3,672. In San Francisco, the second-ranked city on the list, median monthly rent is $2,943, while the median monthly cost to buyers is $5,798, not quite double the rent.
The report looks at the monthly cost of median-priced starter homes, ranging from studios to two-bedrooms, and adds on property tax payments, insurance, and homeowners association fees. It compares those totals against the median price for similarly sized rentals.
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Rents and list prices in Austin shot up fast during the pandemic, but Austin is one of a handful of cities where prices have now begun to decline: The median listing price in Austin is $522,000, down about 5 percent year over year. By comparison, the median listing price in Dallas rose 7.5 percent in the same time span. But even as Austin listing prices have fallen slightly, they are still well above the pre-pandemic median, pushing starter homes out of reach for many would-be buyers.
Still, the city has built more than most in order to accommodate its population growth. Active inventory jumped 260 percent year over year, the second-greatest increase after Nashville, according to Realtor.com’s January Housing Report. Listings increased 25 percent in the same time, behind just Raleigh and Nashville.