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Over the past five years, Austin has transformed into one of the nation’s most dynamic tech hubs. A wave of high-profile corporate moves and expansions has earned the region its “Silicon Hills” nickname. Major developments include:
These developments are only part of the story. Established tech employers like Dell, IBM, AMD, and newcomers like Meta (Facebook) and Google have also expanded their Austin operations. Unemployment in the metro remains very low (around 3.0% in spring 2025) amid this tech hiring. In fact, Austin’s employment base has been growing at breakneck pace – more than doubling since 2000, far outpacing the national job growth ratejpmorganchase.com. The influx of companies and talent has supercharged the region’s economy; Austin’s population surged nearly 11% from 2020 to 2024 alone, with the metro area now topping 2.5 million residents. Roughly 60,000 newcomers arrived in the past year – a testament to how the tech boom has drawn people from across the country. Many of these transplants are coming for high-paying tech jobs or the vibrant startup scene, contributing to what one report calls “bringing more people and more money” into Central Texas.
With the rapid expansion of tech has come notable growth in incomes – at least in aggregate. Both Austin city and the broader metro area now boast median earnings well above state and national averages. Austin’s median household income has climbed to about $91,500 as of 2024, far above the U.S. median, reflecting the influx of higher-paying jobs. In the larger Austin-Round Rock metro, the median household pulled in roughly $94,600 in 2022, up from about $93,600 in 2019 (inflation-adjusted). In other words, even after accounting for inflation, Austin was the only major Texas metro to see a real increase in median income since the pandemic – whereas cities like Dallas or Houston saw median income slip in that period. Austin now has the highest median household income of any metro in Texas.
One driver is the changing mix of the workforce. The share of Austin-area households earning over $100,000 a year has swelled dramatically. Meanwhile, the proportion of middle-income households ($25k–$50k) shrank, suggesting many households moved up into higher brackets (or were supplanted by newcomers with bigger salaries). Indeed, pandemic-era migration played a big role. Austin was a top destination for remote tech workers fleeing pricier cities like New York and San Francisco in 2020–2021. Many of those relocating individuals brought West Coast or Northeast salary levels, boosting the local income pool. The University of Texas and a healthy government and education sector have also contributed to steady wage growth across multiple industries, but the tech sector remains the primary engine driving up average pay.
Tech salaries in Austin are substantially higher than the national average – and have helped pull up overall income figures. As of 2024, the average base salary in Austin is around $82,000, thanks largely to the booming tech industry. Many technical roles pay well into six figures; for example, software engineers, data scientists, and experienced project managers at Austin tech firms often command salaries above $100K. The key point is that the tech influx has elevated the region’s income ceiling and pulled up the median. A growing cohort of young professionals with lucrative jobs (and often stock-based compensation) now call Austin home. This trend is evident in everyday life – from packed high-end restaurants and soaring Tesla registrations, to the construction of luxury apartments targeting affluent renters.
At the same time, not everyone’s paycheck has ballooned. Many long-time Austin residents working in non-tech sectors – from teachers and healthcare workers to service industry employees – have seen only modest pay increases that struggle to keep up with rising costs. The overall per capita personal income in the Austin metro (which includes wages, business income, investments, etc.) did rise about in 2023, reflecting a strong post-pandemic recovery. But much of the income growth has been unevenly distributed. The median income numbers cited above show only a slight real uptick since 2019, implying that after adjusting for inflation the typical household is not dramatically richer than five years ago. In short, the tech boom created big winners – yet many others are only marginally better off in real terms. This divergence sets the stage for Austin’s central question: have residents’ incomes kept up with the cost of living in this tech-transformed economy?
If Austin’s growth has a downside, it’s the sharply rising cost of living – especially housing. The past five years saw an explosion in home prices and rents that has far outpaced income growth for many residents. In fact, Austin shifted from a relatively affordable city to one of the priciest outside coastal metros – still cheaper than San Francisco or NYC, but expensive compared to most of the country. Key living costs contributing to this include housing, property taxes, and transportation. Texas famously has no state income tax, which gives workers more take-home pay, but this is offset by high property taxes (often ~1.8–2.5% of a home’s value annually) and sales taxes (8.25%). Those levies have hit harder as home values surged.
Housing costs in particular have skyrocketed. Austin’s real estate market went into overdrive during the pandemic tech boom. The median home price in the metro shot up from roughly the low-$300,000s in 2019 to well above $500,000 at the peak in 2022. At one point in April 2022, the median house was selling for 5.75 times the median household income, the highest price-to-income ratio Austin has ever seen. This represented a ~65% jump in home prices relative to incomes in just two years – an unprecedented affordability. By mid-2025, the market cooled slightly and new construction has increased supply. This brought the price-to-income ratio down to about 4.3, an improvement from the peak. Even so, housing remains less affordable than pre-boom norms – the current ratio is still well above the historical average of ~3.9, and about 9% higher than the 2015–2019 pre-pandemic average. In short, a typical Austin home today costs 4.3× the typical income, versus ~3.9× a few years ago, illustrating that home prices outran incomes.
For renters, the story is similar. The influx of people and limited housing stock drove rents to record levels by 2022. A typical one-bedroom apartment in Austin now rents for around $1,400+ per month, and a two-bedroom for about $2,100. Prime downtown units can exceed $2,500 for a one-bed, while even far-suburban apartments saw rent hikes during the boom. While rents have recently leveled off or even dipped a bit (average rents in the Austin area are down ~6% year-over-year as of early 2024, thanks to a flood of new apartments hitting the market), affordability has not improved for most renters. New census data show that 52% of Austin-area renters are now “cost-burdened,” spending more than 30% of their income on housing – the highest share in at least a decade. In other words, even many families making $50K or $60K (once a comfortable income in Austin) are now struggling to afford rent.
This crunch is evident despite the recent cooling in headline rent prices. Many renters simply never saw relief – leases signed at 2022’s high rents haven’t gotten cheaper, and necessities like utilities (or childcare, groceries, and gas) have all become more expensive. Inflation in 2021–2023 raised the price of nearly everything, from food to fuel, compounding the affordability issue. By late 2023, Austin’s consumer prices were significantly higher than pre-pandemic, and wages for non-tech jobs generally did not keep up with these rising costs. The result is a squeeze on disposable income for many residents. In fact, one study found hundreds of thousands of Austin renters are now financially “burdened by the price of shelter,” leaving less income available for groceries, healthcare, transportation and savings. Even some higher-income households have started spending more of their paycheck on housing than they used to – over 10% of households earning $75K+ now pay >30% of income for rent – though researchers note wealthier folks might be choosing pricier homes by choice, not necessity.
Geography also plays a role in who is keeping up. Interestingly, incomes have grown fastest in Austin’s urban core, whereas housing prices jumped most in the suburbs. From 2019–2024, the median take-home pay for young adults (25–44) living in Austin’s dense city center rose about 43%, while home prices in the urban core rose ~29% in the same. In other words, in the central city, income growth actually outpaced home price appreciation (a rare case where residents’ buying power improved). But in suburban and exurban areas, it was the opposite: suburban home values leapt ~53% over five years, while incomes for residents there rose only ~42%. Coupled with higher mortgage interest rates post-2022, this means suburban homebuyers have seen housing costs far outstrip their income. The pandemic’s “donut effect” – where remote work led many to seek larger homes in suburbs – drove up prices on Austin’s fringes especially. Even though central Austin’s housing market cooled more (somewhat “depressing” price growth downtown), the Federal Reserve’s rate hikes have raised monthly mortgage payments across the board, eroding affordability even for those whose salaries did rise. In short, any way you slice it, the typical Austin resident’s purchasing power is under strain: some are earning a lot more, but housing costs and living expenses have absorbed those gains, and others are simply being priced out of their own city.
The divergence between surging tech-driven incomes and the rising cost of living carries important lessons for households in Greater Austin. For many, the past five years have brought newfound prosperity – and new financial challenges. This dynamic environment makes prudent financial planning more crucial than ever. Here are a few key implications and strategies for individuals and families navigating Austin’s tech-fueled economic shifts:
Budgeting for Higher Housing Costs: Whether renting or buying, Central Texas residents must budget for housing expenses that now consume a larger chunk of income. For would-be homebuyers, this might mean saving a larger down payment to keep mortgage payments manageable, or considering a smaller home further from the city center. Renters, too, should anticipate that leases can rise upon renewal and plan accordingly (aim to keep housing costs below 30%-of-income, even if that requires tough trade-offs). In this climate, maintaining a robust emergency fund is wise, as housing and tax bills in Austin can be volatile year to year. An experienced financial planner can help analyze rent-vs-buy decisions, taking into account property taxes and expected home appreciation, to see what’s truly affordable for your situation.
Maximizing the Tech Boom Windfall: On the flip side, those employed in Austin’s thriving tech sector may find themselves earning significantly more than they did just a few years ago. It can be tempting to upscale lifestyles in tandem – but it’s critical to channel some of this income growth into long-term wealth. Fortunately, Texas’s lack of state income tax allows high earners to invest a greater portion of their pay. High-income households should consider investing bonuses or stock compensation, rather than assuming the current high salaries will persist indefinitely. The tech industry can be cyclical; a financial advisor (RIA) can help devise investment strategies to diversify beyond concentrated stock holdings (for instance, if much of your net worth is in your employer’s stock or stock options). The goal is to capitalize on today’s prosperity to build a cushion for the future, rather than succumbing to “lifestyle creep.”
Planning for Education and Skill Growth: For those in non-tech fields, the past few years have underscored the importance of education and skills in accessing Austin’s higher-paying opportunities. Many families are investing in training (coding bootcamps, certifications, advanced degrees) either for themselves or their children, hoping to participate in the tech boom. Allocating funds for education can be a wise long-term move. At the same time, established professionals in sectors like healthcare, education, or government might consider negotiating raises or seeking new roles given the tight labor market. With unemployment so low and companies expanding, it’s an opportune time to leverage one’s value – many employers have had to raise wages to retain talent in Austin’s competitive market. Sound financial planning includes managing career growth; a good advisor can help weigh the costs and benefits of further education or a career change in the context of your overall financial goals.
Navigating the Tax Landscape: Austin’s growth hasn’t eliminated its tax advantages – no state income tax remains a big perk for higher earners. However, property taxes here can be a shock for newcomers (a $500K home might carry $9,000+ a year in taxes). It’s wise to factor in those ongoing costs when buying a home and potentially look into homestead exemptions or protests to mitigate tax increases. Sales taxes add up as well at 8.25%. A financial planner can help optimize your approach – for example, taking advantage of tax-advantaged accounts (401(k)s, IRAs, 529 college savings) to make the most of the income tax break, and ensuring that high property taxes and housing costs are balanced within your budget. The right strategies can turn Texas’s tax structure into an engine for greater savings and investment rather than extra consumption.
Retirement and the Long View: Finally, the divergence between income and cost-of-living growth in Austin is a reminder not to neglect long-term goals. Rising salaries during boom times can lull us into complacency, but expenses have a way of catching up. Central Texas households should periodically revisit their retirement plans, college funds, and other long-term targets to make sure contributions keep pace with income and inflation. The fact that Austin’s median income gains barely outpaced inflation since 2019 means that simply saving the same percentage of income as before might not be enough – you may need to save more to account for higher future living costs. Engaging an RIA or financial advisor can bring an objective eye to these plans, ensuring that your financial strategy is updated for the “new Austin” reality. For example, advisors can model scenarios for continued high housing inflation or slower wage growth, so you can be prepared either way.
In summary, Austin’s rapid tech-led growth has been a double-edged sword for residents’ wallets. Personal incomes are at record highs in the metro, thanks to an influx of lucrative jobs, but the cost of putting down roots here has also never been greater. Whether you’re a beneficiary of the boom or feeling squeezed by it – or both – careful financial planning is the key to thriving in this landscape. Austin’s economic expansion shows no sign of slowing, and Central Texas households that plan ahead can seize the opportunities of a booming region while safeguarding against its costs. A mix of analytical foresight and proactive money management (with guidance from financial professionals when needed) will help ensure that your income growth translates into lasting financial well-being, even as the Austin area continues its exciting, challenging, tech-fueled journey.
Disclaimer: The information provided in this article is for informational and illustrative purposes only and does not constitute financial, investment, tax, or legal advice. The views expressed are those of the author and are based on publicly available data at the time of writing. Every individual's financial situation is unique, and the strategies discussed may not be suitable for everyone. Please consult with a qualified financial advisor, tax professional, or attorney before making any financial decisions. Axon Capital Management and its affiliates are not responsible for any actions taken based on the information provided in this article.
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