Economic Outlook in Texas
published on June 30, 2022
“In coming months, the Texas economy will face either prolonged high inflation, the pain that tends to follow from fighting inflation, or possibly both,” said the Texas Real Estate Research Center in an article entitled, “Outlook for the Texas Economy.” Headline inflation as reported by the Bureau of Labor Statistics increased 8.5 percent in March 2022, the highest since the late ’70s/early ’80s. The Texas Consumer Confidence Index decreased as a result.
However, there are optimistic signs for Texas’ economic health: seasonally adjusted employment expanded 1.3 percent during the first quarter of 2022, bringing the unemployment level down to 4.4 percent, and the Dallas Fed’ Texas Business-Cycle Index rose 10.1 percent, with Austin outperforming the major metros.
In the urban triangle, total housing sales grew 4.6 percent in the first quarter. Over one-third of sales were in the $300k-$399k range. Yet, homes in the $400k to $1 million and up range grew by double digits. Sales gains were most significant in the $750k and up range, increasing 70.5 percent.
Texas was the second most popular state for relocations from pandemic-related demographic shifts and preferences. Fifty-six percent of the 170,000 net domestic migrants to Texas chose Austin and Dallas, followed by San Antonio, and then Houston.
Total construction values increased 0.5 percent quarter over quarter, and the single-family construction value hike was its highest in the last six quarters. In March 2022, Houston’s single-family construction projects were worth twice as much as Austin’s “as weather warmed and the construction season started.”
The index that measures current construction activity increased nationally and within the state, and the index that measures future construction activity also increased. “While the construction industry faces many roadblocks, Texas’ new-home market has been propelled by a wave of migrants, housing shortages, and the desire to expand and upgrade,” said the article.
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