In 2024, Texas took the lead in new home construction, contributing to 15% of all housing permits issued across the United States, according to a report from Realtor.com.

“The state has grown rapidly in the last several years as people from across the country and across the world have seen what Texas has to offer,” said Danielle Hale, chief economist at Realtor.com. “In the years since the COVID-19 pandemic, the Texas economy has boomed, especially in high-demand industries like technology, education, manufacturing, and construction. Already-scarce housing inventory from years of under-building was flooded with cash offers, and listing prices and rents soared. Texas has responded by building more and smaller homes to meet demand, helping the market settle and housing inventory climb back to pre-pandemic levels ahead of the nationwide recovery.”

Realtor.com’s data revealed that more than 1 in 4 people shopping for homes in Texas in 2024 were from out of state, with the two largest sources of immigration being international migration and relocations from California.

“The Texas economy is a model for other states,” said Damian Eales, CEO of Realtor.com. “Residents are attracted to Texas first and foremost for its affordable housing, followed by its favorable climate and abundant jobs. This has put Texas on a path to potentially become the largest state by the year 2045. Those are among the many reasons why at Realtor.com®, we’re proud to call Texas home, as hundreds of our employees already do.”

The median newly constructed home in Texas was 2,073 square feet in 2024, a decrease from 2,189 square feet in 2020, marking a 5.3% reduction. This trend mirrors the nationwide decline in new home sizes, as the average new home in the U.S. shrank from 2,112 square feet to 2,035 square feet, a 3.6% drop.

Texas is also at the forefront of addressing housing affordability. In the last two years, the share of newly built homes priced under $350,000 has increased, while the share of homes priced between $350,000 to $750,000 and $750,000 to $2 million has decreased.

“America is facing a severe housing affordability crisis, fueled by a staggering shortfall of approximately 4 million homes,” Eales added. “Our Texas report is just the beginning of a series that will shine a light on the gaps in our housing supply. By showcasing solutions from states like Texas and calling attention to those that are falling behind, we can drive a national conversation that leads to real, meaningful change.”

In addition to the affordability focus, Texas’ rapid expansion in housing construction is also spurred by its growing job market. The state's diverse industries, particularly in technology and manufacturing, continue to drive demand for housing, pushing homebuilders to ramp up efforts to keep up with the demand for homes.

The new report also mentions the expansion of homebuilders into previously underserved areas and the increased availability of more affordable, smaller homes as part of an overall strategy to manage the influx of new residents. Experts suggest that Texas' approach to addressing its housing needs could serve as a valuable model for other states grappling with similar challenges.

Originally reported by Britny Eubank in MSN.