Austin Economic Indicators

October 03, 2024

Austin experienced strong employment growth in August, accompanied by a stable unemployment rate. Home prices and the months' supply of inventory ticked down. Both downtown and suburban office vacancies increased, with downtown vacancies rising above the Texas metro average.

Business-cycle index

The Austin Business-Cycle Index, a broad measure of economic activity, grew an annualized 6.6 percent in August, faster than the 0.8 percent gain in July (Chart 1).

Labor market

Unemployment rate stabilizes

Austin's unemployment rate remained at 3.4 percent in August-below the state's and nation's rates of 4.1 and 4.2 percent, respectively (Chart 2). In August, the local labor force grew 2.0 percent, while the state's increased 3.6 percent, and the nation's grew 0.9 percent.

Employment picks up

Austin employment grew 4.7 percent in August after dropping 2.3 percent in July (Chart 3). Sectors that saw a decline included education and health services (-1,585 jobs) and information services (-134 jobs). Sectors with the most growth were professional and business services (2,741 jobs) and construction and mining (1,106 jobs). Year to date in August, Austin employment fell 0.3 percent, below the state's and nation's growth of 2.2 percent and 1.4 percent, respectively.

Housing

Austin's median home price declined 1.1 percent in August to $432,449 (Chart 4). Year over year, home prices trended down-falling 3.9 percent in the metro and 2.8 percent in the state. Austin home inventories declined to 3.9 months in August, remaining below the six months that is generally considered a balanced housing market. A year ago, home inventory levels in Austin were 3.1 months, while they were 3.1 months in Texas and 3.0 months in the U.S.

Office vacancies

In the second quarter, Austin suburban office vacancies rose 1.4 percent, while downtown vacancies increased 7.9 percent (Chart 5). Suburban office vacancies have been steadily increasing since the beginning of 2021, but downtown vacancies have increased sharply in 2024.

The Austin office suburban market registered lower vacancy than the average of the other Texas metros, but the downtown office vacancy was above average. The average vacancy rates of the other Texas metros (specifically Dallas, Houston, Fort Worth and San Antonio) were 25.1 percent for suburban offices and 24.9 percent for downtown locations. The other Texas metros have had stable vacancy rates in the second quarter compared with the first.

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