March 21, 2017
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Texas has always based its business desirability on a central location, good quality of life and housing affordability. But according to the Federal Reserve Bank of Dallas, housing affordability could be a bygone. Continually increasing home prices, combined with scarcity of starter homes, is eroding Texas cost-of-living advantage.
Dallas Fed economist Laila Assanie indicated that a run-up in home prices is highly unusual in Texas, as “construction tends to respond quickly to an increase in demand.” Housing affordability is also declining; while the median existing home sales price increased by 34% from 2010-2015, the median income increased only 14%.
“Declining housing affordability in the state has eroded the cost-of-living advantage, calling into question whether Texas can maintain its long-term economic and population growth that has often led the nation,” Assanie said.
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