Median home prices and average rental rates hit record highs in all four major Texas metro areas in 1Q 2022 as builders and developers struggled to add new housing fast enough to meet surging demand in the state’s booming cities.
Factors fueling higher prices:
- Strong Population Growth: Texas added more than 310,000 new residents from July 2020 to July 2021 — the most of any other state for the 15th consecutive year.
- Construction Disruption: A slowdown in building activity early in the pandemic delayed many projects while worker and material shortages continue to increase the cost and completion times for new housing.
- Too Few Homes for Sale: Inventories of homes for sale are at or near historic lows in all four markets resulting in bidding wars and higher prices.
- Low Vacancies: Unable to afford to buy, many people are renting for longer and increasingly renewing their leases.
KEY TAKEAWAY: With the state forecasted to add approximately 476,600 jobs this year, demand for housing in major Texas markets is likely to remain strong. It’s important to note that Texas cities still remain more affordable than many areas of the country — a key competitive advantage attracting so many new people and businesses to the Lone Star state each year.