State-of-the-Industry Report Issued at the 2026 Multifamily Housing Summit

The Austin Apartment Association (AAA) presented its annual State of the Industry report at the Multifamily Housing Summit, offering a comprehensive overview of economic and demographic trends shaping the multifamily housing sector, now and in the future.

Austin Economic Outlook

Mac Cummins, Director of Economic Development for the City of Austin, highlighted the City’s efforts and emphasized the symbiotic relationship between economic development and housing, with multifamily housing playing a particularly important role in Austin.  

Cummins notes that “Austin is playing on a global scale,” and that Austin is significantly investing in economic development, adding, “we are recruiting new companies, and seeing companies come to us.” 

Cummins pointed to Austin's diverse workforce, which extends beyond the tech sector, and shared the following breakdown of metro jobs:  

• 21% in Professional & Business Services sector
• 15% are in Trade, Transportation & Utilities
• 14% are in the Government
• 12% in Education & Health

The Information sector accounts for just 3% of Austin Metro’s jobs.

Cummins adds that Austin has “what I call the ‘holy trinity’ - a labor pipeline, access to capital, and education – we offer all three in spades.”

Sharing where population growth is happening, Cummins stated the forecast for housing and multifamily remains strong.  “Multifamily housing helps determine where workers can live, where businesses can grow, and how resilient Austin remains through market cycles.”   

Chelsea Kneeland of Multifamily Insiders further explored the connection between housing and employment, particularly how multifamily housing development impacts not only where people live but also where they work. She shared findings from a recent Texas Apartment Association Education Foundation (TAAEF) study on the apartment workforce and its future.

The Texas Workforce Research Study showcased the industry's impact on Austin's workforce, underscoring the appeal of attractive career paths, job security, and corporate role opportunities,

Demographic Trends

Dr. Helen You, interim director of the Texas Demographic Center, shared insights on population trends in Texas and the Austin region. “Things have been changing rapidly [since the COVID pandemic],” notes Dr. You.  While Travis County’s growth rate has slowed, the region continues to grow, with much of that growth concentrated in the surrounding cities and suburbs.  Dr. You reported, “The biggest increases in the ‘triangle’ [Austin/San Antonio, Dallas/Fort-Worth, and Houston] have been around the central cities, not in the urban core.”

Slower international migration and lower natural population increases have contributed to the slowdown. Nonetheless, Texas continues to lead the nation in domestic migration, both in percentage and in raw numbers. 

Although the region's population is young, the fertility rate remains low, and children make up a smaller portion of the population in the next few decades.  Dr. You added, “Texas is expected to keep growing significantly…and the fastest growing group will be those age 65+.”  Due to these factors, projections mean “our dependency is on net migration versus natural increase.”

New housing units continue to be increasing most in the outlying areas, and renter-occupied housing is highest in central Austin ZIP codes, although “some suburban corridors show higher renter pockets,” states Dr. You.  Austin’s metro reports a lower rate of cost-burdened renter households compared to the other three top Texas metros.  “While Austin has the lowest overall renter cost-burden rate, this is highly correlated with Austin’s stronger renter household income mix.”  Housing affordability has been a driver for where Austin workers live as well – Dr. You notes that “20 years ago, 47% of workers lived within 10 miles of their jobs; now that number is reduced to 35%.”

Market Approaching Equilibrium

After several years of significant growth in multifamily rental housing supply, the market is cooling and attempting to find stability.  Paul Hendershot, Managing Director of Analytics with CoStar, summarized the current state of the industry in short: “absorption is high, vacancy is falling, supply has come off of its cliff, and rent growth is anticipated to stabilize going forward.”

Hendershot notes, “Austin absorbed more units than Atlanta last year.” Adding, Austin leads the nation, even above New York City, in units absorbed as a percentage of inventory. Based on projections, Austin will remain a leader in absorption.  Adding, “[Austin] is settling in and finding a steady pace of between 6.5K and 7K units absorbed every quarter.”

Economic factors, including high borrowing costs, softening market fundamentals, labor shortages, and high construction costs, have made developing new multifamily housing less feasible. In the first half of 2026, approximately 3,200 units broke ground, compared with previous years, when the region delivered over 10,000 units. “East and northeast submarkets have the highest construction…but construction starts really are slowing down and are at the lowest in over a decade.”

Multifamily Market Top Stats:

• Vacancy rate: falling to 11.4% (Austin metro)
• Rent Growth: -1.1% year-over-year
• Construction Starts: 3.2K in the first half of 2026 – lowest in more than a decade

• New units in 2026: 11k, which is down 39% from 2025

Compared with other metros, “in some ways renting in Austin is becoming more attainable, compared to other markets due to higher wage growth.”  Hendershot adds that the reported rent-to-income ratio is at historic lows, which “makes Austin, by this measure, very attractive for those seeking cost-of-living relief, while also seeing steady employment opportunities.”

Looking Ahead to 2027

“This is Texas. Don’t bet against it” – Paul Hendershot

After years of unprecedented growth, the Austin region is entering a more stable and predictable period, bringing new opportunities and challenges.

With a new economic development director, the city is positioned to attract new investment.  With a growing multifamily market, the industry is also positioned to attract new talent. 

As the industry looks to the future, it should focus on new residents’ interest in walkable neighborhoods and housing near transit, while also preparing for properties to sustain longer renter stays and serve an aging population.

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