Which Texas cities are seeing the most growth? What are the best areas to buy a house in Texas right now? What’s going to happen to local markets in 2022? Is it a good time to get into real estate in Texas? Below, we’ll tackle all these questions and will take a data-driven look at what statewide market trends we can expect to see as we head into 2022.
Wrapping Up 2021: Current Real Estate Trends in Texas
To understand what’s happening in Texas, it’s best to zoom out and pulse-check national housing trends first. In the last year, we’ve seen limited inventory, rising prices, and big demand from coast to coast. Redfin reports that we’re still seeing tightened inventory across the country. and home prices are continuing to climb year-over-year. There’s a 25% nationwide reduction in housing supply, which is resulting in a 13.9% average increase in home values.
Are these national trends mirrored in the Texas market? Absolutely. In fact, current state-wide trends are nearly identical to national numbers. Inventory is down almost 25% across the state, while home prices are up 15% year-over-year. Until inventory catches up with demand, we're likely to continue to see prices trending up.
Major Factors Contributing to the State of Today’s Texas Market
Beyond the basic economic drivers of supply and demand, there’s one key thing that continues to impact the market: COVID. Local markets rebounded quickly from declines that hit hard in the first half of 2020. As markets across the Lone Star State began to see more and more real estate activity, fear of potential long-term issues started to fade. But at this point, it remains to be seen when the market will peak.
So where is all the demand coming from? After an isolating year, many people decided to go on the hunt for bigger properties with more outdoor space and distance from their neighbors. This trend, combined with low-interest rates and economic stimulus money, brought an influx of buyers to the market. There’s also a great migration taking place as folks flock to areas with bigger homes situated on larger pieces of land. These larger properties — like those found in Texas — do a much better job of accommodating work, life, home, and school all in one place than cozy big-city dwellings.
All of the above factors translate to hot markets, particularly suburbs of large Texas metros. These areas offer the best of both worlds, as homeowners can get a lot of property bang for their buck while staying close enough to a lively city center to feel connected. Suburban metros are also particularly popular because they provide great access to important essentials like grocery and big box stores, medical facilities, and top-rated schools.
Which Texas Cities Are Seeing the Most Growth as We Head into 2022?
Rocket Mortgage analyzed U.S. Census Bureau data to build a list of the 15 fastest-growing cities across the U.S., published at the end of October 2021. To make the cut, a city has to have a population of 50,000 residents or more and has to have had the fastest growth by percentage across the last decade. Incredibly, six of the fifteen cities on the list are Texas towns.
1. Frisco, Texas (#1 fastest-growing U.S. city)
Thirty minutes north of Dallas lies Frisco, Texas. The city is known for family activities, an abundance of opportunities to take in a sporting event, great areas for biking, and lots of dining, nightlife options, and more.
Frisco has grown an incredible 71% in the last ten years. Some of the city’s massive growth is a direct result of businesses in nearby Fort Worth bringing commuters to town. This includes big-name brands like IBM, Oracle, and AmTrust Financial Services. Zillow data shows that home values have been steadily rising since 2012 and that they increased over 28% in the last year. The median home value is currently sitting at $554,986.
2. New Braunfels, TX (#3 fastest-growing U.S. city)
Midway between San Antonio and Austin, you’ll find a city known as New Braunfels. Known for its strong German ties, the city features a historic downtown district that’s full of character. The city is also home to the nationally-acclaimed Schlitterbahn water park, which features the “largest and most eclectic collection of water rides in the world.” Resident outdoor lovers also enjoy scenic local parks, bike trails, and a stunning natural bridge cavern.
The city has grown 56.6% in the last ten years, reaching a population of 90,403 in 2020. As more and more people call New Braunfels home, property prices have also been steadily on the rise, increasing by 23% from 2020 to today. The median home price is currently around $350,000.
3. McKinney, TX (#4 fastest-growing U.S. city)
Frisco’s neighbor, McKinney has also seen significant growth thanks to major employers in the Dallas-Fort Worth area, including Raytheon and Southwest Airlines. Golf, art, theater attractions, and rich cultural events bring lots of appeal and an eclectic flair to the historic city.
Housing demand is off the charts, resulting in a 30% increase in home prices from 2020 to today. This increase is partially due to the fact that McKinney has repeatedly been recognized as the best place to live and as a great spot for first-time homebuyers to settle. The median home price is currently $442,427.
4. Cedar Park, TX (#7 fastest-growing U.S. city)
Incorporated in 1973, Cedar Park, Texas is home to 1,000 acres of city-owned parks. Multiple tech companies and industrial manufacturers provide ample employment opportunities for residents of Cedar Park and nearby Austin. The city is also near a professional sports multiplex, which is home to two NHL teams and an NBA team. Low crime rates, affordability, and low tax rates also lend to the city’s popularity.
As a suburb just 17 miles outside of Austin, Cedar Park attracts lots of professional talent, resulting in a dynamic population with a median age of 34.74 years and a median household income of $103,000. Almost 50% of local residents have a bachelor’s degree or higher.
5. Conroe, TX (#9 fastest-growing U.S. city)
Situated 40 miles north of Houston lies Conroe, Texas, a city touted as the “perfect blend of starry nights and city lights." A principal city in the Woodlands and Sugar Land metro, Conroe is known as a happening spot with tons of great outdoor play and recreation areas and an abundance of breweries to explore.
With a population of 91,079, the city has seen truly tremendous growth, increasing its population by 74.5% since 2010. Currently, the median household income is $60,343, and home prices are up 19% from this time last year, coming in at an average of $285,589.
6. Round Rock, TX (#13 fastest-growing U.S. city)
Another Austin suburb, Round Rock, is only fifteen miles north of the big city. Nationally recognized brands like Dell and Emerson provide top-notch career opportunities for residents. The tight-knit Red Rock community frequently holds events, including rodeos, local concert series, family-friendly holiday-themed gatherings, and more.
With 33.3% population growth over the last ten years, it appears the secret is out about Round Rock being a great place to live. New listings go super fast, and local houses take just 10 days to sell. The average home price is currently $482,190, up an incredible 51% from this time last year.
Honorable Mentions for Texas Real Estate Markets
Though these cities might not top the fastest-growing list based on census data, they’ve seen consistent growth over the course of the past several years and continue to attract new residents from across the US.
With a population of over two million people, Austin took the number 19 slot on Realtor.com’s 50 Hottest Zip Codes for 2021. Lovingly known as a “weird” place, this happening city has a lively music and entertainment scene and a steady job market. The environment is particularly appealing to young professionals seeking out a city with the energy to match their ambitions. The real estate market is extremely competitive, with the average home topping $601,000, a 41% increase from this time last year.
A popular vacation destination and place to call home, Houston has a little something for everyone. Residents and visitors can stop by the Space Center to check out NASA’s mission control, visit one of many fine art museums, or enjoy an Astros game at the ballpark. Just as diverse as the things to do, Houston’s eclectic neighborhoods also bring a lot of unique flair and distinct character to the area. Home prices average $235,559, up 17% over last year.
Making up half of the Dallas Fort Worth metroplex, this sprawling city is home to over 1.3 million people. Known for its rich culture and art, Dallas boasts big business, containing nine Fortune 500 companies within city limits. Zillow reports that the average Dallas home price currently sits at around $282,000, up almost 19% from this time last year.
Once a popular trading post for cowboys, Fort Worth brings a slightly more affordable option to the table for people seeking prime Texas real estate. Local homes have an average sale price of $271,547, which is just under $10,000 more affordable than neighboring Dallas. Local attractions include a one-of-a-kind twice daily cattle drive, the world’s largest honky-tonk, and a massive entertainment district called Sundance Square.
These four metros make up the heart of Texas and have played a major role in the population growth of all the metro suburbs listed on the fastest-growing cities list referenced above.
The Texas Market is Hot — and Experts Expect It to Stay That Way
Across the state, big-city suburbs and more rural ranch and lake home communities continue to see high demand as home shoppers literally seek more land. Buyers are flocking to affordability, increasing home prices and sustaining a competitive market. There are no signs of stopping this growth as we look forward to 2022.
Job Hammond, the Secretary-Treasurer of the Austin Board of REALTORS®, recently shared what he expects to see over the next 12 months.
“2021 represented a year of strengths in many financial areas," said the Texas real estate agent. "Stock market and bank account balances are up, while unemployment and interest rates are low. These factors represent ideal conditions for the housing market. As long as we continue to see shortages in housing inventory, we should still see an ideal environment for housing growth.”
It’s a Good Time to Become a Texas Real Estate Agent
If you’ve been considering a career change, it’s a fantastic time to get into real estate. Education is affordable and readily available, there’s tons of demand for high-quality agents, and prop-tech (a.k.a. property technology tools) have made the industry more convenient. Throw in a rise in popularity of virtual brokerages and it’s easy to see why real estate is an appealing career opportunity.
Ready to explore a new career in one of America’s hottest markets? Register to start your Texas pre-licensure courses today!