New Texans Keep Coming, But Not as Fast

Native Texans tend to be proud of their heritage. But there is a common bumper sticker where adopted Texans boast their fealty to the Lone Star State: “I wasn’t born in Texas, but I got here as fast as I could.”

Strong population growth from all sources has put a floor under Texas real estate markets. Continuous growth that saw the state add more people than any other over the last 25 years boosted housing markets. Accompanying job growth stimulated demand for all classes of commercial assets. And since most everybody wants to own a little piece of Texas, rural land sales also grew.

Early each year, the U.S. Census Bureau publishes its estimates of population growth. The data covers the 12 months ending in the summer of the prior year—that is, it includes the last six months of one year plus the first six months of the following year. The data for 2025 (summer 2024 to summer 2025) showed Texas retained its top growth spot, again adding more people than any other state.

The recent growth trend shown in the accompanying figure represents changes in the composition of that growth. Census Bureau estimates include three possible sources of change: natural increase (births minus deaths), net domestic migration (from other states), and net international migration (from other countries). Texas has been growing from all sources, but the share has changed.

For the three years following 2020, the state added more people each year, peaking at almost 600,000 new Texans in 2023. Those years saw international migration take the lead in contributing most to our growth. For a few years, domestic migration had been the lead contributor. Total growth was flat in 2024, but most of it was from net international migration. In the most recent data, growth fell by one-third. Fewer than 400,000 new residents were added. Of that total, domestic and international migration accounted for 234,000 people. Total migration from all sources fell by half. Domestic migration has decreased as Texas competitiveness has suffered from higher home prices. Our former affordability advantage relative to our usual competitors in the South and Midwest has eroded. Those competing states have also reformed their labor and tax laws to become more business-friendly. These changes make Texas a little less attractive in relative terms.

International migration has slowed even faster. The Trump administration is being much stricter on both border security and immigration law. In light of this, the drop in international migration will continue and be even more dramatic next year. Remember, the 2025 Census estimate covers only a few months of the current tougher immigration policies. While total migration fell by half this year, some forecasts call for it to fall by half again next year. What will this mean for Texas real estate? This isn’t all bad news.

The state has boomed for so long that governments can benefit from a breather and potentially catch up on infrastructure. Lower migration means there would also be less pressure on home prices with fewer new residents competing for housing. All in all, Texas will weather the new demographic trends with what in most places and times is actually “normal” growth. Still, I suppose we won’t need as many of those bumper stickers for a while.

Source: U.S. Census Bureau

Views expressed on The 338 are those of the authors and do not imply endorsement by the Texas Real Estate Research Center, Division of Research, or Texas A&M University.

The image for this post was generated with AI.