New construction continues to thrive in Texas despite the recent shifts in the real estate market. Builders are identifying opportunities to build in a unique economy and meet consumer demand throughout the Sunbelt region.
Americans Are Flocking to Texas
Data from the US Census Bureau shows that Texas is the fastest growing region in the United States. Why are people moving to Texas in droves? They are searching for a balance of affordable living, quality housing, and job opportunities. The expansion of several corporations over the last decade have opened up several opportunities for employment.
Texas is now home to more Fortune 500 companies than any state in the country. In 2021, 62 corporations relocated to Texas, offering competitive salaries in a location where the cost of living is lower. These jobs pay wages that allow new residents to live a comfortable lifestyle.
Several Texas Cities Rank as Best Places to Live
Ten Texas cities ranked in the US News Top 150 Best Places to Live. The list is compiled by analyzing a job market index, housing affordability, and comparing it to the quality of life in each region. The cities of Austin, Dallas, Houston, San Antonio, Killeen, Beaumont, El Paso, Corpus Christi, Brownsville, & McAllen check boxes for leading a enriching lifestyle with an enticing price tag. In fact, McAllen, TX is one of only 3 cities in the US that is more affordable now than it was from 1995-2003.
Cities with some of the largest growth are located outside major metropolitan areas in Texas. Georgetown, Leander, and New Braunfels account for 3 out of 5 of the cities in the US with the largest percentage increase in population. Georgetown and Leander are outside of Austin and New Braunfels is commuting distance to San Antonio. Buyers are searching in neighboring suburbs outside of the major cities to settle down.
These popular suburbs are still seeing growth despite the current cooling in the market nationwide. Home prices outside of Austin are up an average of 26.3% and median days on market dropped to 23 days, all signifying increasing demand for new homes in these areas.
The steep increase in population can be due to pandemic related migration. When businesses went remote, many people left the expensive cities and settled in nearby suburbs for increased affordability.
Texas also has the highest retention rate of any state, resulting in a growth of about 3,800 more people each week. The ongoing growth in population is contributing to an increased demand for housing.
Texas Construction is Booming, Resulting in a Builder’s Market
New residential construction in Texas is a key factor in its economic sustainability.
- Current inventory shortages across the states are creating a builder’s market.
- Builders are selling houses before any development has begun and have a large pool of buyers eager to purchase.
- Dallas, Austin, & Houston rank in the top 5 cities for construction workers in the United States. Construction companies in Texas are responding to the increased demand for housing.
- In 2021, Texas led the South regions for construction starts at $114.13 billion, an increase of 7% year over year.
Providing the Capital Needed for New Construction in Texas
Builders Capital continues to support the construction businesses building needed housing across the Lone Star State. We have provided capital for over 30 projects to support builders throughout the Sunbelt region in the last 3 years alone.
Builders Capital will be at the Sunbelt Builders Show from July 12th- 15th in Dallas, TX. The show will be a resource for the Sunbelt regions’ construction professionals to connect and be inspired. Manufacturers and suppliers will be showcasing products, technologies, and services to help builders scale their businesses.
Builders Capital will be on the showroom floor at Booth 612. Drop by and speak with some of our loan officers about how we can support your next project in the region.