Roughly 9% of the U.S. population resides in Texas, making it the second-most populous state behind California (nearly 12%). Texas is the second-largest state by land size, behind Alaska.
With room to grow and a growing population, Texas is building new homes at a faster pace than any state in the U.S., accounting for 15% of all new-home construction permits in 2024.
But that's only the headline of the love letter that Realtor.com wrote to Texas this morning, before announcing that the real estate portal and subsidiary of News Corp would be relocating its headquarters to Austin, Texas, from Santa Clara, Calif.
"Basing Realtor.com in Texas puts our company at the heart of innovation and inspiration at a moment of national economic renaissance for America," said Robert Thomson, Chief Executive Officer of News Corp, calling its investment in Austin "a downpayment on the American Dream."
What it calls a "Landmark Report" examines how increased migration to Texas since 2019 has fueled a surge in economic growth, which in turn has fueled a home-construction revival, reinforcing Realtor.com's decision to invest itself in Austin's future.
"The state has grown rapidly in the last several years as people from across the country and across the world have seen what Texas has to offer," said Danielle Hale, chief economist at Realtor.com®. "Texas has responded by building more and smaller homes to meet demand, helping the market settle and housing inventory climb back to pre-pandemic levels ahead of the nationwide recovery."
Economists debate the proximity of a nationwide housing recovery. Andy Walden, Head of Mortgage and Housing Market Research for Intercontinental Exchange, Inc. (ICE), owner of the New York Stock Exchange, called the Midwest and Northeast housing markets "inventory-starved," in an ICE Mortgage Monitor Report published this week.
Nevertheless, for-sale inventory has neared or surpassed 2019 levels in regional markets across the Sun Belt, like Texas.
Affordable New-Home Construction
Today's Realtor.com report cites strong economic performance, job opportunities, and affordability as primary factors in Texas's housing recovery, "especially in high-demand industries like technology, education, manufacturing and construction,” said Hale.
This surge has driven increased demands for housing, with migration from California and international migration contributing the most to recent population growth.
"The Texas economy is a model for other states," said Damian Eales, Realtor.com's CEO. "Residents are attracted to Texas first and foremost for its affordable housing, followed by its favorable climate and abundant jobs. This has put Texas on a path to potentially become the largest state by the year 2045.”
While the downsizing of America's new-home construction is not a new phenomenon, Realtor.com reports that the practice has been standardized to offset affordability challenges. The median size of newly constructed homes in Texas dropped to 2,073 square feet in 2024, a 5.3% reduction from 2020, outpacing the national downsizing trend.
The National Association of Home Builders (NAHB) reported last year that the national median size of newly constructed homes was at its smallest since 2009 at 2,140 square feet.
Texas has also seen an increase in the share of new homes priced under $350,000, making homeownership more accessible compared to other states. Eales emphasized the broader implications of these housing initiatives.
"America is facing a severe housing affordability crisis, fueled by a staggering shortfall of approximately 4 million homes. Our Texas report is just the beginning of a series that will shine a light on the gaps in our housing supply. By showcasing solutions from states like Texas and calling attention to those that are falling behind, we can drive a national conversation that leads to real, meaningful change."
Per Realtor.com, as of December 2024 the median home listing price in Texas was $360,000 — about $40,000 below the national median.
Expanding Options for Homebuyers
Inventory growth has played a critical role in improving affordability, with Texas offering 23.3% more homes priced under $350,000 in 2024 compared to the previous year.
Challenges persist, however. While nearly half (47.5%) of Texas's for-sale inventory is priced at $350,000 or below, only 17% of available homes are affordable for households earning less than $75,000 per year.
Even among higher earners making up to $150,000 annually, only 66% of for-sale inventory falls within their affordability range.
Texas's share of available housing inventory has been steadily rising since 2017, when the state accounted for 7.6% of U.S. home listings. That figure rose to 12.6% by 2024.
Affordability concerns remain, with median listing prices still about $80,000 higher than in 2019, and mortgage rates hovering above 6%. As of December 2024, the typical monthly housing payment was approximately $2,100, assuming a 10% down payment.
Among major metropolitan areas in Texas, San Antonio emerges from the Realtor.com report as Texas's best bet for those seeking affordable housing options. San Antonio consistently offers the highest share of homes priced under $350,000, followed by Houston, Dallas, and Austin.
While affordability has declined in all four metros since the pre-pandemic period, Austin has seen the most significant rebound in lower-priced inventory in 2024. In spite of the rebound, Austin remains the least affordable major city in Texas.
