Austin vs Dallas-Fort Worth

**Home-Price Appreciation: Correction vs. Stability**

The FHFA HPI data tells two very different stories. Austin's index peaked in 2022-Q2 and has been declining for roughly four years — the 2026-Q1 reading of 502.8 is down about 12% from that peak and sits below the 2021-Q4 level, with a YoY decline of -0.8% and a QoQ dip of -0.3%. Appreciation has essentially been flat to negative since 2023, with the index oscillating in a narrow band between roughly 500 and 512 for eight straight quarters. Dallas-Fort Worth, by contrast, avoided a true correction. The Dallas-Plano-Irving division posted a YoY gain of +1.1% and QoQ of +0.6% through 2026-Q1, while Fort Worth-Arlington-Grapevine showed +0.9% YoY and +0.6% QoQ. Both DFW divisions have been grinding steadily higher since their brief 2022-Q4 dip, never falling more than a few percentage points off their peaks before resuming an upward trajectory. For buyers, this means Austin offers a deeper relative entry point — prices have given back years of pandemic-era gains — while DFW offers greater near-term price stability but less potential for a reversion bounce.

**Construction Activity: Supply Surge vs. Steady Pipeline**

Building permit volume is perhaps the starkest difference between these markets. Austin's May 2026 permit count of 1,549 represents a dramatic -53.2% year-over-year collapse, down from readings above 3,000–3,500 per month in mid-2024. This sharp supply contraction may be a leading indicator that the correction is maturing — fewer new units breaking ground now means reduced competitive pressure on existing homes 18–24 months out. DFW, on the other hand, issued 5,107 permits in May 2026 with essentially flat YoY growth (0%), maintaining a construction pace roughly 3.3× Austin's current level. DFW's permit series has been remarkably consistent, generally ranging between 4,200 and 7,700 monthly over the past two years, with no sign of a structural pullback. Austin already absorbed a massive wave — roughly 31,000 apartment units delivered in 2024 alone per Colliers — which drove apartment rents down 17–22% from their 2022 peaks. DFW's supply is large in absolute terms but is being distributed across a metro more than three times Austin's population, keeping per-capita supply pressure more moderate.

**Labor Markets, Rents, and Economic Fundamentals**

Both metros benefit from Texas's lack of state income tax, but their labor markets diverge modestly. Austin's May 2026 unemployment rate is 3.5%, with the trailing 12-month range running roughly 3.1%–3.8% — a tighter labor market anchored by tech (Dell, Apple, Tesla, Samsung's Taylor semiconductor fab) and the University of Texas. DFW's unemployment of 4.0% in May 2026 reflects a larger, more diversified economy spanning finance, defense (Lockheed Martin), aviation (American Airlines, Southwest), logistics (BNSF), and energy (ExxonMobil). DFW's size provides resilience through sector diversification; Austin's tech concentration offers higher income potential but also more cyclical exposure. On rents, Austin's HUD 2026 two-bedroom FMR is $1,852/month versus DFW's $1,931/month — a modest $79/month difference that likely understates how far Austin's apartment market rents have actually fallen from peak, given the 17–22% decline noted in market data. Population growth favors Austin on a percentage basis (2.67% YoY vs. DFW's 1.48%), but DFW's absolute growth is enormous given its 8.3 million base.

**Cost of Living, Livability, and Trade-Offs**

DFW carries a meaningful cost-of-living advantage: its index of 97 sits roughly 3% below the national average, while Austin's 129 index reflects a 29% premium — driven largely by housing costs that remain elevated even after the correction. Austin's median household income of $99,897 exceeds DFW's $92,733, partially offsetting its higher costs, though the gap in COL is wider than the income differential. Austin's property tax rates of 1.8%–2.1% also run slightly higher than DFW's ~1.70% average, a meaningful ongoing cost given Texas's reliance on property taxes in lieu of income taxes. Both metros are firmly car-dependent (Walk Scores of 42 and 46, respectively) with nearly identical average commute times (~28–29 minutes). Austin offers slightly more sunny days (~300 vs. ~234 for Dallas) with comparable summer heat. DFW's sheer scale — 8.3 million people — provides more labor market depth, more employer diversity, and a broader range of suburban submarkets from Collin and Denton counties in the north to Tarrant County's established neighborhoods in the west.