Texas Could See Increase in People Moving to State as Housing Market Shifts

Texas saw a surge in people moving to the state during the pandemic, and experts predict the state will see another increase in 2025 as buyers get the upper hand in the housing market.

Why It Matters

The Texas housing market is experiencing a mix of trends, with rising home prices and increased sales. The median home price in Texas is $343,800, up 2.3% from last year, yet still lower than the U.S. median of $429,963. This indicates a more stable and positive outlook compared to the national market.

The state's sustained population growth and job creation, particularly in high-paid sectors, are driving strong housing demand. But rising inventory and slower sales could shift the market to a more balanced state in 2025. While that could favor buyers, experts suggest the potential for continued price increases and competitive conditions.

What To Know

Joel Berner, Senior Economist at Realtor.com told Newsweek Texas is still in a seller's market with just over three months of inventory. However, if inventory continues to rise and home sales slow, the market could soon shift to a more balanced or neutral state.

"We foresee more available for-sale inventory and slightly higher listing prices in Texas in 2025," Berner said. "Even as high mortgage rates act as a serious headwind to the market, we expect buyers to adjust and carry on with their plans to move."

Daniel Oney, Research Director at Texas Real Estate Research Center at Texas A&M University told Newsweek that Texas is experiencing significant population growth, averaging 1,300 new residents daily due to natural increase and migration. The state has added over one million new jobs since the pandemic, particularly in high-paid sectors like professional services and IT, leading to strong housing demand expected to continue into 2025.

As of November 2024, the median home price in Texas is $343,800, according to Redfin. That's up 2.3 percent from the previous year. The average days on the market is 58 days, up 11 days year-over-year.

A homeowner pushes a For Sale sign into the ground as his family loads up a vehicle in the background. Getty Images/shironosov

In that period, there were 23,828 homes sold, up 7.1 percent from last year. Only 11.3% of homes sold above list price, which is down 2.1 percent year over year.

Median Sales Price

Home prices in popular regions like The Woodlands and Austin housing markets come with higher median sale prices, reflecting their desirability and growth. But other areas such as San Antonio and Corpus Christi offer more affordable options for potential Texas homeowners.

Median Days on Market

At 27 days, the Woodlands has one of the shortest amounts of time on the market, indicating a highly competitive market. Plano also has a relatively quick selling period with homes typically on the market for 38 days.

Number of Homes Sold

Houston had 1,428 homes sold, reflecting strong demand. San Antonio and Ft. Worth also showed significant market engagement.

What Experts Are Saying

Joel Berner, Senior Economist at Realtor.com told Newsweek: "Economic growth has been and will continue to be a main driver of housing demand. Many companies are moving to or starting in Texas, and strong employment in the state will draw people in from around the country and around the world, as well as empowering current Texans to upgrade their homes.

Affordability is another driver. The median listing price in Texas was $359,500 in December, compared to $402,502 nationally. People looking to buy a home can afford to do so in Texas more readily than in other parts of the country, and many are choosing the state."

Daniel Oney, Research Director at Texas Real Estate Research Center at Texas A&M University told Newsweek: "With the onset of higher mortgage rates in 2022, Texas saw a significant decrease in home sales. Sales fell from a 2021 peak of 414,000 homes to about 330,000 in each of the last two calendar years.

Even though the Federal Reserve has lowered the Fed Funds rate, mortgage rates have not fallen. In fact, they are approaching 7 percent again. Realtors and mortgage bankers noted that Texans were adjusting to higher rates and the market was recovering, but uncertainty over the election may have dampened the usually busy summer sales months. We are projecting sales to be up in 2025 for the first time in three years."

"In our forthcoming 2025 real estate forecast we see growth in single-family permits, which will help affordability. We also project the first increase in home sales since 2021. Prices have been flat after a big runup in 2020 and 2021. We think there will be modest price increases statewide in 2025. Single-family rental rates will be a little higher this year."

What Happens Next

Wondering if you should buy a house in Texas now or wait? It depends on several factors, including your financial situation and market conditions.

Berner states, "Economic and population growth will drive further demand in the housing market, keeping prices high and squeezing inventory. This is tough news for prospective buyers, but a welcome by-product of a healthy state economy."

If you have a stable income and find a home that meets your needs at a reasonable price, now might be a good time to buy. But some people will need to wait to get their finances in order or to see if the market changes.

Before taking the plunge and buying a home in Texas, prospective homebuyers should consider the following key steps:

Assess your financial health: Review your credit score to see if it meets the minimum requirements for a mortgage. Make sure you have enough saved to cover the down payment and closing costs. Calculate your debt-to-income ratio (DTI) to ensure it's within the acceptable range, typically below 36%, as this number influences your mortgage approval and interest rate.

Determine your budget: Calculate how much house you can afford by considering your monthly income and expenses. You'll need to factor in down payment, closing costs and monthly mortgage payments. A mortgage calculator can help you estimate these costs and ensure they align with your budget.

Get pre-approved: Get your mortgage pre-approval from a lender to show sellers you are a serious buyer and gain a competitive edge in the housing market.

Research neighborhoods: Investigate potential neighborhoods for amenities that matter most to you, like shopping centers and public transportation. Check safety ratings and crime statistics and evaluate the quality of local schools, even if you don't have children, as it impacts property value.

Hire a real estate agent: Choose a local real estate agent with experience in the Texas housing market. A knowledgeable agent can provide valuable insights into market trends and help you find the best property that fits your needs.

Plan for additional costs: Budget for additional homeownership expenses such as property taxes, which Berner notes is relatively high in Texas and "are based on the market value of the home and need to be factored into buyers' budgets." Also factor in homeowners insurance and maintenance costs, including routine upkeep and unexpected repairs.