By: Joshua Finley
Texas must build hundreds of thousands of homes to address a persistent housing shortage, according to a report by the Texas Comptroller’s Office. While the state has issued more new building permits than any other since 2008, construction is still not keeping pace with the growing population, particularly in its largest cities.
The report found that Texas was short by 306,000 homes in 2023. This shortage is most pronounced for middle- and lower-income earners, exacerbating the state’s ongoing affordability crisis. Median home prices in Texas have surged by 40% between 2019 and 2023, according to data from Texas A&M University’s Real Estate Research Center. The Dallas-Fort Worth area has been hit especially hard, with median home prices climbing nearly 44% over the same period. The median price of a home in this region rose from $294,000 in 2020 to nearly $400,000 by 2023.
“Our team is working to alleviate this shortage through our mixed-use projects, providing much-needed housing solutions across Texas and growing communities like Waco,” Steven Mann says from Propertize Ventures. The housing shortage is compounded by the state’s rapid population growth. Dallas-Fort Worth led all U.S. metro areas in population growth and domestic migration between 2020 and 2023. From 2021 to 2022, net domestic migration to Texas reached nearly 225,000, far surpassing any annual migration gains recorded in the previous decade. As more people move to the state, the demand for housing continues to outstrip supply, driving up prices and making homeownership increasingly unattainable for many Texans.
“Texans continue to suffer from elevated prices and high interest rates, putting pressure on the cost of borrowing and home ownership,” said Texas Comptroller Glenn Hegar. “Our state, known for its low cost of living, is now facing declining housing affordability as our population rises.”
Despite Texas being traditionally viewed as an affordable place to live, rising housing costs are changing the landscape. A recent poll from the University of Houston and Texas Southern University found that 90% of Texans believe housing affordability is a problem where they live. First-time homebuyers are particularly affected, as they must consider not only the high cost of homes but also additional expenses. Property tax bills, homeowners insurance, association fees, and inspection costs add up quickly, making the dream of homeownership more distant for many.
The report notes that homeowners’ insurance rates in Texas increased by 6.9% in 2021 and 11.8% in 2022, further inflating the costs associated with owning a home. These rising costs are layered on top of mortgage payments, which are also subject to high interest rates, creating a significant financial burden for potential buyers.
While the report stops short of providing specific policy recommendations, it points to several factors affecting affordability, including zoning laws, land-use regulations, and the impact of institutional investors in the single-family home market. These issues have led to an environment where new construction is often hampered, limiting the availability of affordable housing options.
“By leveraging our expertise in structuring flexible and innovative financing solutions, we’re able to accelerate the development of projects that bring both quality housing and vibrant communities to cities like Dallas-Fort Worth and Waco. Our commitment is to not only address the housing shortfall but to do so in a way that keeps affordability in focus, ensuring Texans have access to homes that meet their needs both today and in the future”, Will DiRe from Propertize Ventures explains.
Lawmakers in Texas have attempted to tackle the issue by taking steps to reduce the overall cost of homeownership. Efforts to lower property tax burdens have been made in recent years, but the report indicates that more work is needed. “Lawmakers have taken critical steps in recent years to lower the overall cost of homeownership by reducing the property tax burden on Texans,” Hegar said. “But this issue remains daunting and key to our continued overall economic health.”
Hegar emphasized the importance of continued legislative efforts to address the housing shortage. “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,” he added.
As Texas continues to grow, the state’s ability to provide affordable housing will be critical to maintaining its economic health and quality of life for its residents. Without significant action to increase the housing supply and reduce costs, the current shortage could pose long-term challenges for the state.
Published by Celeste P.
