Texas is Missing More Than a Half Million Houses
It’s no secret that home inventories around the country are at their lowest point in decades. Many metro areas have a shortage of housing. Texas alone is short more than a half-million houses from what’s needed, according to a report by mortgage giant Freddie Mac. And nationwide, there’s a deficit of more than 3 million homes.
“We are in the midst of a demographic tailwind, and we expect home purchase demand will remain strong well into the next decade as the peak cohorts of millennials turn 30 years of age in 2020 and beyond,” Sam Khater, Freddie Mac’s chief economist, said in the report. “Simply put, new housing supply is not keeping up with rising demand. We estimate that the housing market is undersupplied by 3.3 million units, and the shortage is rising by about 300,000 units a year. More than half of all states have a housing shortage, and the shortage is no longer concentrated in coastal markets but is spreading to the middle of the country in more affordable states like Texas and Minnesota.”
Freddie Mac finds that 29 U.S. states have a housing shortage, with Oregon, California, Minnesota, Florida, Colorado and Texas being in the worst shape. All those thousands of people who’ve moved to Texas for jobs have tightened the state’s housing market.
“Domestic migration is worsening the housing shortage issue in some states,” Freddie Mac’s report said. “In pursuit of new opportunities in states with stronger economies, people have migrated from states with surplus housing like West Virginia, Alabama and North Dakota to states with housing deficits, putting pressure on high-growth states. The housing shortage is causing demand to increase in more affordable interior states with stronger economies, causing states such as Texas, Colorado and Minnesota to experience a supply shortfall.”
Homes in Texas — particularly affordable single-family houses — remain in short supply even though the state leads the country in housing construction. Dallas-Fort Worth and Houston were the top markets in the country for new-home starts in 2019. Austin and San Antonio were also among the 10 biggest home construction markets last year.
Statewide, there was only a 3.1-month supply of houses listed for sale with Texas real estate agents at the end of 2019. The inventory was even lower in Dallas-Fort Worth at just 2.3 months, according to the Texas Realtors association...