Housing Trends: Red States Boom, Blue States Struggle

In the ongoing housing crunch in the U.S., red states like Texas are outshining blue states like California and New York. Texas has been successfully building millions of new homes in recent years, causing prices to drop and delighting potential homebuyers.

The housing shortage, rooted in the aftermath of the 2008 financial crisis, has led to increased prices, making it challenging for buyers.

Despite a recent uptick in available homes, the supply remains historically low, with only a 3.5 months’ supply at the current sales rate. This limited supply benefits existing homeowners, as house prices tend to remain stable with less than six months of supply.

In contrast, Texas has taken the lead in new home construction, significantly outpacing California. Over the last two years, California issued 116,693 single-family home permits, while Texas issued a staggering 293,569. In the past decade, California issued a total of 1,069,096 permits, compared to Texas’s impressive 2,017,652.

Housing Trends: Red States Boom, Blue States Struggle

According to Lawrence Yun from the National Association of Realtors, Texas and Florida are the standout states in new home construction. In 2023, Texas and Florida led in absolute terms, while Idaho, North Carolina, and Florida took the lead in per capita terms.

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In a nutshell, the housing market sees red states thriving in construction, bringing down prices and boosting buyer satisfaction, while blue states grapple with slower growth and higher housing costs.