HOUSTON – (By Dale King, Realty News Report) – Texas has a well-established reputation for doing things in a big way.
Texas was ranked the number one state in the U.S. for new home building permits issued in 2024, according to a new report from Austin-based Realtor.com. That represents 15 percent of all home building approvals granted across the nation – a notable achievement considering Texas owns just 9 percent of the American population.
The Realtor.com report also says more home building permits were issued in Texas last year than in the entire Midwest and Northeast regions.
Texas Will Surpass California in Population
The Lone Star State is currently the second largest state in the union. But it’s on track to become the largest state in America by the year 2045, overtaking California, currently the most populated state in the nation..
The strong pace of residential growth in Texas is expected to continue at least into the middle of the century, reaching a population of nearly 42 million. This net increase of more than 10 million new Texans in the next 26 years will not only be the most intense growth rate of any state in the U.S. but will also be enough to knock California out of its current Number 1 spot as the most populated state.
People move to Texas for plentiful jobs, cheaper housing and a different climate, and, coincidentally, the two largest sources of immigration to Texas are international migration and relocation from California.
The report notes that the shift in ranking by 2045 will be due to a combination of strong net positive growth (population gain) in Texas as well as net negative growth (population loss) from California.
Texas Housing More Affordable Than U.S. Overall
The newly issued analysis notes other home construction data favorable to the Lone Star State. “Texas is a proven leader in the push to build more affordable new homes, and in the last two years, the share of new builds on the market priced under $350,000 has increased while the shares of new builds priced from $350,000 to $750,000 and from $750,000 to $2,000,000 have both fallen.”
The median-priced home in Texas has been less than the national median for quite a while despite significant recent price growth. After climbing rapidly during the pandemic, home prices in Texas have settled somewhat as easing demand and increased inventory relieved some upward price pressure. As of December 2024, the median listing price in Texas was $360,000, roughly $40,000 below the national median.
In 2024, nearly half (47.5 percent) of all for-sale inventory in Texas was priced at $350,000 or below compared to just 40.1 percent of inventory nationally. During the past year, inventory growth helped affordability. The report found that in 2024, 23.3 percent (roughly 50,000) more homes for sale in Texas were priced under $350,000 compared to the year before.
Though Texas offers considerable inventory in lower price tiers, the price distribution of for-sale homes does not match well to the state’s income distribution. Fifty-one percent of Texans make less than $75,000 per year, but just 17 percent of for-sale inventory is affordable to this income level. Even for 80th percentile earners, making up to $150,000 per year, just 66 percent of for-sale inventory is affordable.
Urgent Need for New Homes in Texas
With the rapid population growth Texas has experienced in the past several decades, an urgent need has arisen for more new homes in the state. Builders have taken notice and made a significant contribution to the state’s demand.
During the past five years, the amount of home construction in Texas relative to the country at large has held steady. However, as the portion of the U.S. population that lives in the state continues to grow, opportunity for expanded residential construction in Texas exists. Since 2020, Texas has consistently seen a larger share of newly built homes among all dwellings for sale.
These new homes, much in line with the population growth of the state, are primarily in the Texas Triangle. Of the newly built homes listed for sale in Texas, 79.1 percent are in the Houston, Dallas-Fort Worth, San Antonio or Austin metropolitan areas.
“In both Texas and the country, the new-construction share climbed during the pandemic and the immediate post-pandemic period as existing-home sellers pulled back from the housing market and builders continued to add homes,” says the report. “Now, as existing home sellers re-engage with the housing market, we see that the still-elevated share of new-construction listings is slowly normalizing.”
Feb 11, 2025 Realty News Report Copyright 2025
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