Texas metro housing supply struggles to keep up with job growth
Report shows how housing crisis in metro cities will worsen unless homebuilding catches up with job growth
Last year, Dallas-Fort Worth’s economy created jobs nearly four times as fast as developers could build new homes where those workers could live — and that has been the case for several metropolitan areas across Texas and the nation.
An analysis by Dallas-based CONTI Capital shows that as the economy rebounds from the pandemic downturn, but supply chain issues persist, employment growth in most major cities is far outpacing the building of housing for the workers those jobs attract.
The DFW area saw the biggest disparities among Texas metros — for every home or apartment unit permitted in the past year, the economy created 3.8 jobs. For Austin and Houston, the ratio averaged around two jobs per new unit.
The reason for this skewed ratio is the booming job market In Texas, which is restrained only by businesses’ appetite for expansion, while the housing supply is constrained by the limited supply of materials, buildable land and permits.
The new report does show that the supply of residential permits in U.S. metro areas is increasing. The number of permits for apartment units in properties consisting of five units or more rose by 16.3 percent year-over-year in April, but CONTI estimates that this small increase in housing supply will not be enough.
“Between the lack of affordability in the home-buying market, high mortgage rates, huge numbers of prime renters and jobs pulling migration to Sun Belt markets,” the report states, “we foresee much more apartment supply will be needed in the near-term to meet demand.”