It’s not just your imagination – it is getting more difficult every year for families to live comfortably in Texas. Climbing mortgage rates, skyrocketing home insurance rates, and increased population can make finding your dream home feel impossible. Why are housing costs being driven up? There are several factors contributing to the rising cost of housing in Texas outlined below.
Population Growth and Urbanization
In the past year, the population of Texas grew by nearly half a million people. The state has seen significant growth and urbanization, particularly in major cities like Houston, Dallas, Austin, and San Antonio. This influx of people has increased demand for housing, pushing prices up.
Economic Growth
Texas has a robust economy with a strong job market in various sectors, including technology, healthcare, and energy. This economic prosperity attracts more people seeking employment, further driving up housing demand.
Land and Material Costs
The cost of land in popular areas of Texas has increased. Additionally, the prices of construction materials have risen, partly due to global supply chain disruptions and increased demand. This increase in material costs directly impacts the cost of new home construction and renovations.
Limited Housing Supply
In many areas of Texas, the housing supply has not kept pace with the demand. This imbalance between supply and demand leads to higher prices. Delays in construction and challenges in the homebuilding industry, such as labor shortages and permitting issues, exacerbate this problem.
Low Interest Rates
Historically low interest rates in recent years have increased the purchasing power of buyers, leading to more people entering the housing market and competing for available homes. This competition drives prices up.
Migration from Other States
Texas has become a popular destination for people moving from other states, attracted by its relatively lower cost of living, no state income tax, and favorable business climate. This migration contributes to increased demand for housing.
Zoning and Regulatory Issues
In some areas, zoning laws and regulatory hurdles can limit the development of new housing, contributing to a shortage in supply and thus higher prices.
Investment and Speculation
Real estate investment, both from domestic and international investors, can drive up prices, especially in desirable areas. Speculation in the real estate market can also contribute to higher housing costs.
At LaFollette Custom Homes, we have our finger on the pulse of the unique housing market in the Brazos Valley area. As a company that has been family-owned and operated since 2000, we are committed to helping you and your family create the home of your dreams at a competitive price without sacrificing luxury or quality. Contact us today to learn more about our family and our commitment to creating your luxury, custom-build home.