Austin, Texas spent most of the 2010s as a poster child for affordable urban living — a major city with no state income tax, vibrant culture, and a tech scene growing in the shadow of Silicon Valley's high costs. Then the pandemic happened. Remote workers flooded in, housing demand exploded, and Austin transformed from one of America's best cost-of-living stories into something considerably more complicated. In 2025, the question is whether Austin still makes financial sense — and for whom.
What the Numbers Actually Show
Austin's BEA Regional Price Parity (RPP) index has risen from roughly 96–97 in 2018–2019 to approximately 103 in recent data. That 7-point increase means costs are now 7% higher relative to the national average than they were five years ago. Median rents in the Austin metro, which were near $1,100–$1,200 for a one-bedroom in 2019, reached well above $1,600 by 2023 before modest cooling. Home values roughly doubled between 2020 and 2023 before the rate environment slowed appreciation. By national standards, Austin is no longer cheap — but it's far from the most expensive.
The No-Income-Tax Advantage Still Matters
Texas's lack of a state income tax remains a powerful financial argument for high earners. On a $120,000 salary, moving from California (which would charge roughly $7,500–$9,000 in state income tax) to Texas saves that amount annually. On a $200,000 salary, the savings approach $15,000–$18,000 per year depending on deductions. Even with Austin's higher cost of living compared to 2019, the tax advantage alone often justifies the move for professionals relocating from California, New York, Illinois, or other high-tax states.
Housing: Where It Gets Complicated
The hardest hit category in Austin is housing. Home prices rose so dramatically that the price-to-income ratio moved from reasonable to stretched. The good news for 2025: higher mortgage rates slowed appreciation, and significant apartment construction in the Austin metro has added inventory, putting modest downward pressure on rents from their 2022–2023 peaks. Buyers willing to look in suburbs like Pflugerville, Round Rock, Cedar Park, and Kyle can still find meaningful value compared to the city core. Renters are in a better position in 2025 than they were 18 months ago.
Austin vs. Its Competitors
The relevant comparison for most Austin movers is against other major metros, not their origin city. Austin (RPP ~103) remains cheaper than Seattle (~112), Boston (~118), San Francisco (~122), and New York (~132). It's comparable to Denver (~106) and slightly cheaper than Nashville (~107). Among major Sun Belt cities, Austin competes closely with Dallas-Fort Worth (~99) — where the DFW metro's RPP is marginally lower. If you're choosing between Austin and Dallas, Dallas offers slightly lower overall costs but a less distinctive urban character.
The Verdict: Who Should Still Move to Austin
Austin in 2025 makes the most sense for: tech and finance professionals relocating from higher-cost coastal metros (the tax and cost savings remain substantial); remote workers whose employers are based in high-tax states (the no-income-tax benefit is immediate); and people who specifically value Austin's culture, music scene, outdoor access, and growing arts community. It makes less sense for: people relocating from affordable Midwest cities (Austin is now more expensive than most of them); and entry-level or mid-career workers without high salaries (the income-to-rent ratio has deteriorated meaningfully from its best years).