TEXAS, USA — Texas still needs to keep up with growing demand and combat a housing shortage, despite having the most new building permits since 2008, according to estimates in a new report.
Texas has had the most new building permits for privately-owned housing units since 2008, but the report found building still isn’t keeping up with the state’s population growth, particularly in Texas’ largest cities. Texas was 306,000 homes short of demand in 2023, according to the report released by the Texas Comptroller’s Office.
The report cites a lack of housing supply for middle and lower-income earners in particular as key to the housing affordability issue in the state.
Median home prices in Texas rose by 40 percent between 2019 and 2023, according to data from Texas A&M University’s Texas Real Estate Research Center. In Dallas-Fort Worth, the median home price jumped by nearly 44% between 2019 and 2023. The median price of a home in DFW was $294,000 in 2020 and jumped to nearly $400,000 by 2023, according to data from the Texas A&M Real Estate Research Center.
Also between 2020 and 2023, DFW led all U.S. metro areas in population growth and domestic migration. Between 2021 and 2022, net domestic migration to Texas was nearly 225,000, far exceeding any annual domestic migration gains from the previous decade.
“Texans continue to suffer from elevated prices and high interest rates that put significant upward pressures on the costs of borrowing and home ownership, and so this report covers an immediate issue,” Texas Comptroller Glenn Hegar said. “Simply put, our state, which is generally well-regarded for its low cost of living, is facing the pressures of a decline in housing affordability as our population and demand for housing continue to rise.”
Ninety percent of Texans say housing affordability is a problem where they live, according to a recent poll from the University of Houston and Texas Southern University.
First-time homebuyers must also consider other expenses on top of the cost of the home itself including property tax bills, homeowners insurance, homeowners association costs, inspection fees associated with the buying process and reserves for additional repairs.
Average homeowners’ insurance rates in Texas, for example, rose by 6.9% in 2021 and 11.8% in 2022, according to the report.
Hegar stopped short of proposing recommendations to address the housing affordability issue, but the report pointed to zoning, land-use regulations, and the impact of institutional investors in the buying and selling of single-family homes and more as impacting affordability.
“Lawmakers have taken critical steps in recent years to lower the overall cost of home ownership by reducing the property tax burden on Texans, and we are making progress as a state toward lowering artificial barriers and removing regulations that limit or inhibit home building,” Hegar said. “But this issue remains daunting and key to our continued overall economic health. My office will continue to work with legislators to provide support as they work to address this issue and prepare bills for the upcoming legislative session.”