Out-of-state movers are not driving Texas' surging home prices, according to new research from the Texas Real Estate Research Center.
“There is essentially no correlation between Texas' statewide home-price appreciation and migration patterns over the past 15 years," said Wesley Miller, senior research associate for the Center at Texas A&M University.
Prompted by concerns of residential affordability as newcomers compete for limited housing, Miller’s research analyzed the demographics and financial data of interstate migrants to Texas, particularly from higher-income states, such as California and New York, over the past 15 years.
The research was based on U.S. Census Bureau statistics and proprietary data provided by Infutor on the residential and financial histories of people moving to the state.
"Migration into Texas actually peaked in 2006,” said Miller, explaining that if interstate migrants were behind Texas’ surging residential market, then rising home costs should have correspondingly slowed down since then.
“We hear so much about 'everybody's moving to Texas. Texas is such a fast-growing state.' Well, actually Texas' population is growing at a decreasing rate. What gets missed here is Texas is a fast-growing state relative to other states in the nation."
The research found the home ownership rate of people from other states relocating to Texas amid the escalating housing boom, was much lower than the overall rate in Texas, said Miller.
"The homeownership rate of people moving across state lines in their first year – only about 40 to 45% of the people own homes,” said Miller. "So that's much lower than just the overall homeownership rate in Texas, if you look at incumbent Texans."
According to 2019 data from the American Community Survey, the median age and home ownership rate for incumbent Texans is 41 years old and 73%, respectively.
The analysis also dismissed assumptions that Texas transplants from other states have driven up the residential real estate market because they tended to be wealthier than incumbent Texans. Miller explained housing costs continued rising even though the wealth disparity remained flat.
"The median income of an interstate mover into Texas is about $8,000 higher than the median income of an incumbent Texan. So there's a difference but that difference has been stable for 15 years."
Miller added that even though out-of-state movers do not appear to be driving annual home-price fluctuations in general, they are more likely to impact local markets, such as the Austin and Dallas areas.
Miller said the ongoing surge in Texas' median home price, which hit a new record in November at $319,112, is mostly due to factors such as low mortgage interest rates, housing shortages, and the state’s booming economy.