Texas is blazing a trail in the real estate market, drawing in newcomers from across the nation. Since 2019, Texas has seen a massive influx of people, gaining nearly 400,000 residents by the end of 2021. In 2022, another 230,000 people made Texas their new home, ranking second only to Florida in terms of migration.
A significant portion of this migration wave originates from California, where sky-high real estate costs have driven many to seek more affordable housing in Texas. Tech giants like Oracle and Tesla have also moved their headquarters to Texas, attracting highly-educated workers.
What sets these newcomers apart is their youth and education. Most fall between the ages of 20 and 29 and tend to have college degrees. Many work in STEM careers or managerial positions, giving Texas' job market a boost. On average, employment in Texas is growing at about twice the rate compared to the rest of the nation.
The good news for these new arrivals and prospective homebuyers is that Texas offers relatively affordable housing options. Some Texas cities have been recognized as top real estate markets, especially for first-time buyers.
In 2023, McKinney, a suburb near Dallas-Fort Worth, claimed the top spot in WalletHub's “Best Real Estate Markets” report. This ranking considers factors like housing affordability, population growth, job opportunities, and home price appreciation. Frisco, Denton, Allen, and Austin also made it to the national top 10.
Another report focused on first-time buyers and identified Killeen, a city nestled between Austin and Dallas, as the number one market for its affordability, available inventory, and growth potential. Killeen offers promising opportunities for those looking to step into homeownership.
Not only is Texas attracting domestic migrants, but international buyers are also showing interest.
Despite initial pandemic-related slowdowns in cross-border moves, foreign buyers are now investing heavily in Texas real estate. From April 2022 to March 2023, international homebuyers spent over $4 billion in Texas, purchasing nearly 10,000 homes. Approximately 2.8% of all home sales in Texas during this period were attributed to international buyers.
While total home sales in Texas have dipped compared to the previous year, new construction sales have seen a notable increase, now accounting for over 20% of all sales. In July 2023, 25,870 homes were sold in the state, reflecting an 8.4% decrease from the previous month and a 32% decline over a three-year period. However, the time a home spends on the market remained steady at 56 days in July, and active listings increased to 2.3% of all homes, totaling approximately 85,000 listings. Texas maintains a 3.3-month supply to meet July's sales pace.
Home prices in Texas have experienced steady growth, with new and existing home prices rising by 0.2% from June to July, reaching an average of $337,700. The Austin-Round Rock metro area witnessed a slight price dip of 0.5% from June to July, but it still holds the highest average home prices in the state. These small fluctuations indicate overall stability in Texas' local real estate markets.
So wrapping things up, Texas remains a hot destination for homebuyers. With favorable market conditions, affordable housing options, and a strong job market, Texas is an attractive place to buy a home. For prospective buyers, this is an opportune time to explore the market and secure their dream homes before potential changes in interest rates. For more information on securing a great rate, reach out to Texas United Mortgage today!
