To draw the picture of Austin rent prices over the past several years is to trace a dizzying mountain — up, up, up. And then a slope. A small slope, but a slope. Down. Not up.

For the past year, the average price of rent in the Austin area has been falling. Rent prices have decreased by about 6% year over year. The average monthly rent is now $1,528 for an apartment any size, down $100 a month from last year.

According to data from Zillow, this is the longest sustained drop in rent prices in the past decade.

“It’s bad for landlords and it’s great for tenants,” said Jake Wegmann, a real estate professor at the University of Texas at Austin. “We should be happy about this.”

The cause? A surge in apartment building and a drop in the number of people moving to the area.

“During the pandemic we saw all of this demand and developers said, ‘We need to build,’” said Ali Wolf, chief economist at Zonda, a company that tracks home construction data.

Tens of thousands of people moved to Austin in the early years of the pandemic. Many could work from home, while others could afford to leave shared living situations and look for their own apartments. In response, rent prices rose at an incredible pace. To developers this indicated a need: more homes. In 2022, developers started building about 40,000 new apartments, more than they had in any subsequent year.

While the population surge that defined Austin in 2020 and 2021 has since slowed, tens of thousands of new apartments are still opening. That’s because of the nature of construction; typically, several years pass between breaking ground on a new building and opening apartments to renters.

What typically happens when developers start building a significant number of new rental homes is that prices drop, Wegmann said, but often only among the most expensive apartments. But there are so many new apartments in Austin that prices are falling across a spectrum of buildings, from apartment complexes with gyms and pools to buildings built half a century ago and beset with much-needed repairs.

The average rent price for these older apartments is down 9% over the past year, according to data from the firm MRI Software.

“This is like adding chairs to the music chairs game,” Wegmann said. “You end up with more and more empty chairs, which give people looking for apartments more choices. Their landlords have to cut rents to fill apartment buildings.”

But both Wegmann and Wolf cautioned that falling rent prices does not equate to more affordable rent. In the year leading up to falling rents in Austin, prices surged by nearly 20%.

A study from the Harvard University Joint Center for Housing Studies found that in 2022, nearly half of all renters living in Austin and the surrounding counties spent more than a third of their income on rent, a metric many experts agree is unaffordable. Rent prices in Austin began falling a year later.

As for whether rents could continue to drop, Wolf said yes.

“This one feels like to me one of the easier crystal balls to answer,” she said. A large number of new apartments are still under construction, and when they open to renters that means more supply of housing. “As we look at the next year, [falling rents are] almost a guarantee.”

But as rents drop, so does the income for developers and the incentive to build. Wegmann said builders are already halting some projects, a trend likely to continue.

“We’re gonna certainly see a retrenchment,” he said. “We’re going to see way fewer projects starting over the next couple of years … That’s capitalism!”