Texas Housing Market Could Be Getting a Major Change

Texas lawmakers are exploring reforms of zoning laws in cities, a move that could unlock the construction of more homes, improve the supply of houses available for sale, and reduce prices in the future.

The Lone Star state had experienced significant activity during the pandemic as workers from other parts of the country flooded the area, increasing demand for homes and pushing up prices.

In February 2020, the median listing price of a home in Texas was about $287,000, according to Federal Reserve Economic Data. That pricing peaked at about $402,500 in the summer of 2022. While values declined in February, they came in at about $360,000—still higher than where they were prior to the pandemic.

Legislators in Texas are contemplating changing zoning laws and land use rules in the state to spark more housing construction which they believe could push supply to meet the demand that, in turn, could ease pressure on prices, according to The Texas Tribune.

Houston State Republican Representative Cody Vasut is one of the lawmakers who has signaled his support for a change in regulations to open up the market for more housebuilding.

"We want to have good policies that encourage development in order to lower prices," Vasut was quoted as saying by the newspaper. "And the best way to do that is to get the government slightly more out of the way so that the free market takes off and provides a good product at a lower price."

Newsweek contacted Vasut for comment via email on Friday.

Polls suggest that Texans are amenable to changes that could encourage more building. Eighty-three percent of residents in the state approve policies that will simplify and speed up permits, 70 percent support allowing apartments over garages and in backyards, while 45 percent want to see the reduction of minimum sizes of lots, according to a survey by the Pew Charitable Trust.

Housing economists have argued that part of the reason home prices are high is a lack of enough inventory to meet demand. Some research suggests that the country is 5.5 million homes short of fully meeting demand, according to a 2021 study by the National Association of Realtors.

One way to help improve the gap is changing zoning laws, the group said.

"Incentivize shifts in local zoning and regulatory environments to substantially increase the quantity and density of developable residential space," their analysis said.