AUSTIN, Texas — Texas, like many states in the nation, is facing a housing crisis.
However, contrary to popular belief, a new study found people moving to Texas are not the reason for the rising cost of single-family homes.
The Texas Real Estate Research Center’s recent report was a broad analysis focusing on statewide data, rather than local migration and housing market trends. Not only did it find migration has a little impact on housing prices, it also discovered that there aren’t as many people moving to the Lone Star State as we might think.
Real estate agents such as Dr. Kerrie Carter-Walker have witnessed the spike in housing prices firsthand. She’s been selling homes in the Austin area since 2019, but now most of her clients are buying outside of the the city.
“Austin, haha, it’s very expensive,” Carter-Walker said.
Zillow’s monthly report shows the average cost of a home in the Austin-Round Rock area is $573,123. That’s a 45.4% increase from last year, the largest percentage increase among major metros in the U.S. But even homes Carter-Walker is showing in Manor, Texas, are priced at $400,000 and up.
“A lot of people are struggling to be able to become homeowners,” she said. “So we’re seeing either two or three people on a loan in order to qualify for a house.”
Many Texans, including some in the housing industry, have pointed fingers at out-of-state homebuyers in higher income areas like California for increasing prices and pushing Texans out.
Wes Miller with The Texas Real Estate Research Center says that’s not true. He’s a senior research associate who worked on the TRERC’s study, which Miller says the center decided to conduct because there’s been so much attention on this “migration myth.”
“We don’t see, surprisingly, this relationship between migration and housing prices,” Miller said.
The center’s analysis looked at aggregate median home prices and found they have been rising steadily since 2010 with peak growth in 2013. The peak year for domestic migration (the number of people moving to Texas) was in 2006. Since then, population growth has actually slowed, only recently increasing when the pandemic hit.
Miller says preliminary data suggests migration numbers might be approaching 2006 levels.
“The number of people coming into Texas is not higher,” he said. “People are still coming into Texas, that’s true, but it’s not accelerating, but we know that housing prices have accelerated."
Some have suggested the people moving to Texas have more money, which drives up home prices. In Miller’s research on home sales and residential histories, the median of out-of-state homebuyers pay about $60,000 more than Texans, but that’s been the case for the past 15 years when migration had slowed down.
Furthermore, the report found when looking at price per square foot, there was no difference between out-of-state and in-state purchasers. Miller also says people that move across state lines are younger and less likely to be homeowners.
“If you see these things and you think they’re moving at the same time, it’s natural to say, well, one must cause the other,” he said.
The cause of these costs is more likely related to economic factors like mortgage interest rates, low housing supply, labor and construction shortages — where the pandemic has also played a major role.
However, while this study finds out-of-state movers are not driving annual home-price fluctuations statewide, they are more likely to affect specific neighborhoods or local markets, such as Austin.
“We aren’t saying that migration and population change, that those factors don’t affect housing prices and housing demand, they do, more people means more demand for housing, that means higher prices,” Miller said. “The point here is that there seems to be other factors that are much more important.”
Carter-Walker says those coming to the area for tech jobs do have an impact, but interest rates and lack of inventory are the main problems.
“There’s a correlation with those people moving here,” Carter-Walker said. “We have Tesla now, we have Samsung on the way.”
For real estate agents, as the price of homes goes up, the number of transactions goes down because there is less to go around, which could mean less income.
“If you have one house and 10 people fighting over one house, only one Realtor, only one client is going to win that home,” she said.
So while migration might not be the problem to these houses prices, the real question is, what’s the solution?