Demand for single-family homes in Texas is high due to an oil boom and strong economic recovery from the Great Recession, and homebuilders are struggling to keep pace. Coupled with low inventory, median home prices are rising faster than incomes.
One result of this strong demand, combined with the tight construction labor market, is stronger wage growth in residential construction in Texas than in the nation. New Geography reports that inflation-adjusted average weekly wages in residential construction rose 22.3 percent from first quarter 2012 through first quarter 2017, while the national average grew only 16.8 percent.
Texas has a vast supply of land suitable for development and relatively few building regulations. During the U.S. housing boom in the mid-2000s, Texas recorded modest home price appreciation, while prices nationwide climbed to record levels (Table 1). Similarly, when the housing market peaked and home values collapsed across the U.S., price declines in Texas were muted.
