Austin, TX tech hub with strong job growth; leading real estate market for investors and residents alike. This report covers current market conditions, the full investment arithmetic on a median-priced rental, and where Austin ranks against the 19 other metros tracked here.
Current Market Snapshot
Investment Analysis
With a gross yield of 4.8% and a median price of $475,000, Austin sits at the lower end of the yield spectrum. A typical 2-bedroom property rents for approximately $1,900/month based on HUD Fair Market Rent data.
The affordability index of 72 suggests housing costs exceed what the median household can comfortably afford — watch for affordability-driven demand moderation.
Market Temperature: Hot
With a median DOM of 28 days and approximately 5,200 active listings and fierce competition, Austin's market is currently classified as hot. Low inventory is supporting seller leverage; buyers should move decisively on well-priced properties.
The Numbers on a Median-Priced Rental
Buying the median Austin home at $475,000 with 20% down takes $109,250 in cash — a $95,000 deposit plus roughly $14,250 in closing costs at 3% — and leaves a $380,000 loan. At 7.0% over 30 years that is $2,528/month in principal and interest.
On those assumptions the median Austin rental produces a 1.56% cap rate and falls roughly $1,910 a month short of covering debt service. Cash-on-cash return on the $109,250 invested is -20.98%, and the debt service coverage ratio is 0.24× — below 1.0×, meaning the property cannot service its own debt at 20% down — this is an appreciation play, not a cash flow one. On a rent basis, you need $4,157 a month to break even — 119% above the $1,900 HUD benchmark.
Rate and Rent Sensitivity
Financing cost dominates the outcome. One percentage point on the mortgage rate moves monthly cash flow by more than a 10% swing in rent does:
| Mortgage Rate | P+I Payment | Monthly Cash Flow |
|---|---|---|
| 6.0% | $2,278/mo | -$1,660/mo |
| 7.0% | $2,528/mo | -$1,910/mo |
| 8.0% | $2,788/mo | -$2,170/mo |
| Rent Scenario | Monthly Rent | Cap Rate | Monthly Cash Flow |
|---|---|---|---|
| HUD FMR − 10% | $1,710/mo | 1.16% | -$2,071/mo |
| HUD FMR | $1,900/mo | 1.56% | -$1,910/mo |
| HUD FMR + 10% | $2,090/mo | 1.97% | -$1,749/mo |
How Austin Ranks
Among the 20 metros covered here, Austin is 15th by gross rental yield and 5th most expensive. Its 4.8% yield sits below the 5.15% median of the set, and its $475,000 price sits above the $390,000 median. The price-to-rent ratio is 20.8× and the price-to-income ratio is 5.8× against a median household income of $82,000.
The metros closest to Austin on gross yield are Raleigh, NC (4.9%), Nashville, TN (5.0%), Dallas, TX (5.0%). If Austin is on your list, those are the markets whose numbers you should be holding it against — not the national average.
What Has to Be True for Austin to Work
A median-priced rental here consumes $22,920 a year in cash. That is not automatically a bad deal: the same loan repays $3,860 of principal in year one, so the true first-year drag is about $19,060. To break even on the cash line alone the property has to appreciate 4.83% a year, against the +3.2% the metro has actually posted over the past twelve months. Hold it five years and amortisation alone builds $22,300 of equity — the question is whether you can fund the shortfall for that long without selling at the wrong moment.
Key Data Points
| Metric | Value |
|---|---|
| Median Sale Price | $475,000 |
| YoY Price Change | +3.2% |
| Median Days on Market | 28 days |
| Active Listings | 5,200 |
| Est. 2BR Fair Market Rent | $1,900/mo |
| Gross Rental Yield | 4.8% |
| Median Household Income | $82,000 |
| Affordability Index | 72 |
| Price-to-Rent Ratio | 20.8× |
| Price-to-Income Ratio | 5.8× |
| Gross Rent Multiplier | 20.8 |
| Cap Rate (45% expense basis) | 1.56% |
| Cash Flow at 20% Down | -$1,910/mo |
| Cash-on-Cash Return | -20.98% |
| Break-Even Rent | $4,157/mo |
Getting Live Data via API
ZipMarketData provides live data for all ZIP codes within the Austin, TX metro. Use the /market-stats endpoint with any Austin ZIP code for the most current figures — or run the same analysis without writing code in the dashboard.