"The Lone Star State is being "discovered" by the rest of the country because of its affordable housing, lower cost of living and cost of business, greater employment opportunities and appealing lifestyle. Events and circumstances point toward a Texas-sized boom between 2005 and 2030. The state's population and economy as well as its housing and commercial real estate markets are poised to explode in volume and prices. Unless something as catastrophic as the 1980s oil bust occurs in the next couple of decades, the momentum born in the first five years of the new century should only get stronger." This is the opening paragraph of a January 2008 article in Tierra Grande, a journal of the Real Estate Center at Texas A&M University (read the full article).

 Texas' population is projected to grow by ten million people, from about 23 million in 2005 to 33 million by 2030, a 43.5 percent increase or roughly 1.7 percent per year. The Texas state demographer projects Texas' population will add between nine million and 18 million people, expanding to a total population between 32 million and 41 million (from 41 to 77 percent). The wide growth variance depends on the rate of population immigration, both domestic and foreign. The projections reflect immigration rates equal to the 1990- 2000 rate (100 percent case), half the 1990-2000 rate (50 percent case) and equivalent to the 2000-2004 immigration rate. Averaging the state demographer's projections results in a projected 2030 population of 36.4 million people, an increase of 13.6 million or 59 percent.

 The majority of the growth will be in the four major metro areas - Dallas, Houston, Austin, and San Antonio. Housing affordability may be one of the most significant growth stimulants for Texas during the first half of this century. Historically, the Texas housing market has maintained a relative balance of supply and demand despite periods of accelerated growth (the oil boom) and significant decline (the oil bust). Texas is the most housing-affordable high-growth state in the nation.

So far, skyrocketing home prices common to fast-growing states like California and Florida have not occurred in Texas. In mid-2007, the state's median-priced home ($151,000) was about two-thirds the national median ($229,000) [Figure 8] and about 25 percent of California's median ($589,000). The Texas Affordability Index measures the relationship between median family income and the ability to buy the median- priced home. Texas' current affordability index stands at 1.52 compared with the nation's 1.16. The index indicates that a family in Texas earning the statewide median family income has 152 percent of the income required to qualify for financing on the median-priced home. The national median family income is only 16 percent greater than the required income to purchase the national median-priced home.

Home prices in Austin continue to remain steady, and home sales continue to outpace the nation as a whole.