Californians are fueling Texas' booming housing market: report
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LOS ANGELES - Texas is experiencing rapid growth in its housing market, according to a new report by Realtor.com, which examines the reasons behind the influx of new residents and the state's efforts to address housing affordability and the current state of the housing market.
What we know:
Texas has become the fastest-growing state in the U.S., with the report identifying housing, jobs, and climate as the top reasons for this migration.
Danielle Hale, chief economist at Realtor.com, notes that Texas has seen significant economic growth in sectors like technology, education, manufacturing, and construction since the COVID-19 pandemic.
A general view of the Texas state flag on March 30, 2023 in San Antonio, Texas. (Photo by Mike Mulholland/Getty Images)
More than 1 in 4 people shopping for homes in Texas, according to the data, are from out of state. The two largest sources of immigration to Texas are international migration and relocation from California.
By the numbers:
Texas leads the nation in new house permits, accounting for 15% of the 2024 U.S. total, despite having only 9% of the U.S. population, the report found.
The median newly constructed home in Texas is 2,073 square feet, smaller than the national average, reflecting the state's focus on building more affordable homes, data showed.
In 2024, nearly half of Texas's for-sale inventory was priced at $350,000 or below, compared to 40.1% nationally.
The backstory:
Historically, Texas has been known for its affordable housing market. However, the pandemic led to a surge in home prices due to increased demand and limited inventory.
The state has since worked to increase the housing supply, helping prices stabilize and inventory return to pre-pandemic levels.
Why Texas?:
The report found that affordable rental options and abundant job opportunities make Texas stand out for renters.
Single family homes in a residential neighborhood in San Marcos, Texas, US, on Tuesday, March 12, 2024. (Photographer: Jordan Vonderhaar/Bloomberg via Getty Images)
In 2024, Austin and San Antonio were ranked among the top 10 rental markets by Realtor.com and Austin was also regarded as the top rental market for recent college graduates.
Why you should care:
Texas's approach to housing affordability and economic growth serves as a model for other states facing similar challenges.
The state's ability to attract new residents and businesses has implications for its future growth and potential to become the largest state by 2045.
What's next:
As Texas continues to build more affordable homes and attract new residents, the state is poised for further growth. However, challenges remain, such as aligning the price distribution of homes with the income distribution of its residents.
The report suggests that Texas's strategies could inform national conversations on housing affordability and supply.
"America is facing a severe housing affordability crisis, fueled by a staggering shortfall of approximately 4 million homes. Our Texas report is just the beginning of a series that will shine a light on the gaps in our housing supply. By showcasing solutions from states like Texas and calling attention to those that are falling behind, we can drive a national conversation that leads to real, meaningful change."
The Source: Information for this story is from Realtor.com.