Austin Named Nation’s Top Apartment Market

AUSTIN – (By Dale King, Realty News Report) – Austin ranks as the top apartment market in the nation, according to a new study by Realtor.com.

San Antonio, located about 75 miles from Austin, also ranked near the top of the “Top 10 Markets for Renters” – a Realtor.com report naming metros that earned high praise for their rental affordability, availability of leasable units, economic growth projections and shorter than average commute times.

The survey says Austin, Oklahoma City, Okla., Birmingham, Ala. and San Antonio nabbed the top four places, respectively, in the overall rankings. The 10 top-tier communities – all located in the South and Midwest — placed highest in the nation for their encouraging rental and related attributes.

The capital of the Lone Star State nailed the Number 1 spot on the Top 10 list with positive qualities that include a rent-to-income ratio of 19.7 percent and a high rental vacancy rate of 9.0 percent, “leading to strong affordability and availability for renters,” says the report compiled by Santa Clara, Calif.-based Realtor.com.

“Top markets as a group are located in metro areas that have an average rent-to-income ratio of 21.0 percent” or less, the report says.

San Antonio, which came in fourth among the Top 10, reports a 21.3 percent rent-to-income ratio, a nudge above the average, but still within the affordability ballpark. The community also boasts an 8.8 percent vacancy rate and an average commute-to-work time of 26 minutes – the same as Austin.

In the overall report, Oklahoma City ranked second, Birmingham, Ala., third and Minneapolis, fifth. All of the high-ranking cities are experiencing economic growth, attracting many young professionals, says the Realtor.com analysis. Austin and Raleigh (No. 9) were also named top rental markets for 2024 college graduates.

In addition, cities such as San Antonio and Norfolk, Va., with large military contingents stationed locally, offer “strong community support, quality services, cultural diversity, enhanced security and real estate stability, making them attractive places to live.”

The report says a traditional rule of thumb is that no more than 30 percent of a household’s gross income should go to housing expenses. Among the top 10 communities, the rent-to-income proportion ranged from a low of 17.7 percent in Oklahoma City to 23.8 percent in Nashville, Tenn.

The ratio of median rent to household income shows the percentage of incoming revenue spent on housing. Lower is better, the report says, since this typically means households have more income to spend on other things.

“Over the last year, we continued to see strong demand for rental properties, especially among younger generations prioritizing the benefits of renting, like flexibility and relative affordability, while home prices and mortgage rates remain high,” Danielle Hale, chief economist at Realtor.com, says in the report.

While no cities from the Northeast or West made it into the top 10, Lawrence, Mass., in the Boston metro area, is the top rental market in the Northeast, and Denver, Colo. leads in the West, the survey notes. The relatively low rental affordability and low rental vacancy rates in both markets caused them to rank below the top 10.

In the report, Hale made mention of “some bright spots in the rental market around the U.S., in cities and towns [other than the top 10] that offer renters good job opportunities, a decent commute, flexible lease terms, maintenance-free amenities and more rental options to choose from at relatively affordable prices.”

Still, she said, living in markets with a high share of renters indicates excellent access to urban amenities, including public transportation, entertainment, dining options and cultural attractions, which are highly appealing to renters, says the report. In addition, these markets are more likely to have well-established tenant protection policies, such as rent controls, eviction protections and high habitability standards.

Among the top 10 cities on the list, the share of renters ranges from 40.0 percent to 56.1 percent. Austin boasts the largest share of leaseholders at 56.1 percent.

The report also points to several common features found among the Top 10 communities:

A favorable rental vacancy rate. With more options to choose from, renters may wield greater bargaining power when negotiating with landlords. Among the top 10 markets, the rental vacancy rate ranges from 5.2 percent (Norfolk, Va.) to 12.3 percent (Birmingham).
A lower forecasted unemployment rate, indicating that renters might face less competition when looking for jobs, suggesting better job security. The unemployment rates in the top 10 markets ranged from a low of 2.9 percent in both Minneapolis and Nashville to a high of 3.5 percent in Birmingham and San Antonio. Austin recorded a 3.3 percent unemployment rate.
Shorter commute times. The top cities and towns had average commutes ranging from a low of 24 minutes in Oklahoma City, Birmingham, Ala., Minneapolis and Kansas City, Kan. to a high of 27 minutes in Sandy Springs, Ga.
Other finishers in the Realtor.com Top 10 report are: Sandy Springs, Ga., sixth; Nashville, Tenn, seventh; Kansas City, Kan., eighth; Raleigh, N.C., ninth and Norfolk, Va., 10^th.

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