Californians are 56% more likely to make the move for cheaper housing. Change of climate, a new job or a transfer, the desire to own a home and not rent and employment loss or search for more new work are other motivators.

In-migration from abroad is also important. It accounted for almost two million people between 2009-2023. Canada, Mexico, the United Kingdom, Germany and Australia were the main sources. Many of them were attracted primarily by the climate, being 36% more likely to move for that reason compared to other foreigners who immigrate to the U.S. Seeking a better neighborhood, looking for work, wanting better housing and owning rather than rent were other important factors.

The report also noted the importance of Texas’s economy and labor market. Its workforce had grown to 15.1 million by the end of 2023, with 14.5 million employed. It has added more workers than any other state in the past decade. However, there have been shifts in the makeup of the labor force. The number engaged in natural resources and mining has shrunk, while employment in professional and business services has risen by 42%. Construction, education and the services sectors have also grown.

Less expensive housing is another draw. In December 2024, the median listing price for a house in Texas ranged between $360,000 -- $40,000 less than the national median. However, the median household income was less than $5,000 below the national median. The median listing price per square foot has eased very little, suggesting that more small, affordable homes are for sale in the state, the report commented.

In 2024, 47.5% of all for-sale inventory in Texas was listed at $350,000 or less, compared to 40% of national inventory. Still, many are priced out of the market. “Roughly 23% of Texans make less than $35,000 per year. However, only about 2% of for-sale homes are affordable at this income level. Similarly, 51% of Texans make less than $75,000 per year, but just 17% of for-sale inventory is affordable at this income level. Even for 80th percentile earners, making up to $150,000 per year, just 66% of for-sale inventory is affordable,” the report stated. “Available inventory is not well aligned with local income levels.” On the other hand, it may attract in-migrants from states with more expensive housing.

The share of home sales in the four largest Texas metros – Houston, Dallas-Fort Worth, San Antonio and Austin – has slipped from 75.2% in 2016 to 70.9% in 2023. The report speculated that this was because of worsening affordability in these metros, especially Austin, and more home options, especially newly constructed homes, in smaller areas. Relatively high home prices remain a problem for home buyers in the state. The median listing price in 2024 was $80,000 more than the 2019 average, and mortgage rates are above 6%.

In November 2024, the Census Bureau counted Texas as the state with the most permitted units for new construction. It accounted for 15% of all housing permits in the nation, even though it only has 9% of the population. There is still an opportunity for expanded residential construction, according to the report.

It also has a larger share of new construction among all homes for sale. New ones less than in the nation as a whole. Almost 80% of new home construction is in the Houston, Dallas-Fort Worth, San Antonio and Austin metros. However, as in the rest of the country, the square footage of homes is diminishing.

Rents are also lower in Texas than the average in the top 50 markets in the U.S. However, it also saw some of the nation’s fastest rent increases during the pandemic. A flood of new multifamily construction led to an average vacancy rate of 9.6% in Texas’s four major metros in 3Q 2024 compared to 6.9% nationwide.

Homes in Texas still face significant climate risk, especially in Houston. Almost half (46.2%) of the state’s homes are at severe risk of hurricane wind damage with a potential value of $1.28 trillion. And extreme heat is a risk for 90% of homes, both from a health standpoint and from home maintenance costs. It’s enough to wilt the yellow rose of Texas.