Texas is experiencing a housing shortage that is driving home prices and rents to higher levels. According to a recent report from Texas Comptroller Glenn Hegar’s office, the state is short by 306,000 homes. This shortage is largely due to increased demand as more people move into Texas. Central Texas, particularly cities like Austin and Round Rock, have seen some of the most significant price increases, making the housing crisis more visible in this region.

Home prices in Central Texas, especially in the Austin-Round Rock area, reached their peak in 2022, with median prices exceeding $500,000. Though prices have slightly decreased, housing remains unaffordable for many. The lack of available homes and competition in the market continues to drive prices up. As a result, there are fewer affordable options for first-time homebuyers.

The economic boom in Texas has led to a big increase in new residents in Central Texas. Between 2021 and 2022, nearly 225,000 people moved to the state, which has put more pressure on the housing market. Homebuilding hasn’t kept up with this fast population growth, leading to a shortage of homes. Higher land costs have made builders focus on more expensive homes, making it harder for lower- and middle-income families to find affordable housing.

To fix the housing affordability issue, the report suggests zoning changes. New zoning regulations in several Central Texas cities now allow more homes to be built on single lots. This could help increase the housing supply and reduce pressure in high-demand areas. Other ideas include lowering minimum lot size requirements and making the permitting process faster for local governments.

The housing shortage in Central Texas reflects the broader issue across the state, where demand is higher than the number of available homes. Without action from local and state governments to address zoning laws and create more affordable housing, Texas risks losing its reputation for affordability. Addressing these challenges will be crucial to ensuring that Texas remains a place where both new and existing residents can find affordable homes.