There are many variables at play, especially with regards to taxation.
Right now, your income levels (if filed jointly) does offer some student interest tax deductions that don't require itemization. Next year, you may be just below the limit or just about the MAGI limit of 160k. You may wish to run the tax math to see if it is more beneficial to file your taxes separately or jointly. At 137k MAGI income, your tax benefit is roughly $500 this year. Next year, it may be 0 if your MAGI is 160k.
The decision about what to do comes down to your timeline and personal preference. Since you are presumably renting a new place in 4 months, I assume you will stay there for at least one year, so the soonest a house becomes a realistic possibility is January 2019.
I understand you will get a higher pay job next year, but for simplicity sake, assume your budget remains the same for the next 2 years. Anything additional would go into savings or more expenses (such as raising a family, new car/commute, life style creep, etc)
You need to invest a decent chunk of the money to at least beat inflation. There are also numerous investments that reasonably return more than your student loan rate. That should be the first goal.
Scenario 1: Maintain budget, change investments vice savings account.
Your 68k loan at $2400 per month will be paid off in 2.5 years with 4100 in interest paid. In 18 months (home buying time), it would be at roughly 28k.
45k changed to a 7% investment in 1.5 years would be at 50k at house buying time.
Your 2k a month saved be 36k (closer to 43k+ if you add in additional rental savings and higher yield investments).
The average house in Austin is around 400k.
20% down payment is needed to get rid of PMI (an additional 300+ a month). To save an extra $300+ a month, your financial outlook would be:
28k in debt with a year left,
$1700 a month mortgage/escrow (80k in equity), and
<10k in savings.
with 5% DP:
28k in debt
$2150 a month in mortgage (20k in equity)
<70k in savings
That 60k additional in savings would have to return 9% to overcome the higher mortgage payment and PMI costs.
Option 2: Pay off student loan now
Student loan debt: 23k paid off in 10 months at 500$ in interest paid.
Savings at 18 months: 36k (43K+ as described in Scenario 1)
Additional student loan savings: 8 months at 2.4k: 19k (20k with interest)
Home buying time:
$0 debt
$63k saved. Not enough for a 20% downpayment, thus PMI and 5% (43k saved)
$2150 a month in mortgage (20k in equity)
Fast forward one year into owning the home:
Scenario 1:
Student loan paid off
1700/month mortgage (roughly 85-90k equity)
35k+ in Savings
Scenario 2:
Student Loan paid off
$2150 a month mortgage (roughly 25-30k equity)
70k at 7% = 75k +24k savings = 100k Savings
Scenario 3:
Student Loan paid off
$2150 a month mortgage (25-30k equity)
43k at 7% = 46k +24k savings +29k loan savings = 100k savings
This is all rough math, but the bottom line is this: Would you rather have
100k in invested assets, 30k equity, and $2150 housing cost OR
35k in invested assets, 90k equity, and $1700 housing cost
The equity/profit is tax free once you sell the home (useful if you are thinking of it as a "starter" home or intend to use a HELOC for say solar panels or home improvements). The 65k investment difference realizes a $450 housing savings. This is effectively an 8% return with no tax consequences.
