Why Texas Is a Good Place to Invest in Real Estate

From a home buying and real estate investment standpoint, the state of Texas has a lot going for it. A combination of economic strength and population growth help sustain home values.

And aside from the Austin anomaly—where home prices skyrocketed during the pandemic and then plummeted afterward—Texas housing markets typically enjoy a lot of stability.

This guide explores some of the factors that make Texas a good place to invest in real estate. Whether you’re a first-time buyer or professional investor, you’ll find these insights helpful.

Six factors that make Texas a solid real estate market:

1. Texas’s fast-growing population continues to fuel strong long-term housing demand.
2. A diverse, expanding economy and job growth keep attracting new residents.
3. No state income tax and landlord-friendly policies make Texas investor-friendly.
4. Multiple major metros and smaller cities offer strong, diverse housing markets.
5. Homes remain relatively affordable compared to coastal states, boosting demand.
6. Ongoing infrastructure projects and new construction support future growth.

Why Invest in Texas Real Estate

Texas stands out nationally as an attractive real estate market for both traditional home buyers and professional investors, and for many reasons.

Growth has a lot to do with it. The Lone Star State has led the U.S. in population gain for 14 consecutive years (adding ~560,000 residents in 2024 alone). This fuels the housing market by increasing buyer demand.

Here’s a closer look at why Texas is a good place to invest in real estate:

1. Population Growth and Migration

Texas’s population surge is driving strong housing demand. The state added over 2.14 million residents from 2020 – 2024 (including ~560,000 in 2024 alone). 

Major metros like Austin, Dallas-Fort Worth, and Houston are expanding rapidly. Newcomers are attracted by job opportunities and relatively low cost of living, among other factors.

This influx of new residents has fueled one of the longest and most sustained housing booms in U.S. history, resulting in sustained demand for homes.

The takeaway: A fast-growing population ensures steady housing demand, making Texas one of the most reliable long-term real estate markets in the country.

2. Strong Economy and Job Market

Texas’s economy is one of the largest and fastest-growing in the nation (though it performs poorly in other areas, such as financial literacy and health insurance).

If Texas were a country, its GDP would rank in the global top 10.

Energy, technology, healthcare and manufacturing firms are expanding across Texas cities, and major corporations like Tesla, Oracle, HP, and others continue to relocate to the state.

This strong employer base creates thousands of jobs. This in turn brings more people into the housing market, pushing up home values and rents over the long term.

The takeaway: Steady demand is one of the key factors that make a real estate market a worthwhile investment, and Texas has that in spades.

3. Pro-Business Climate

The business-friendly tax and regulatory policies in Texas attract both people and capital to the state. There is no personal state income tax, and overall tax and regulatory burdens are low.

Landlord-friendly laws, streamlined construction permitting, and straightforward zoning make it easier to build and manage property.

According to the state’s Economic Development and Tourism Office:

“Texas offers companies of all sizes and all industries one of the best business climates in the nation, with a fair, transparent tax and regulatory structure.”

The takeaway: The state’s business-friendly policies attract both employers and workers, creating an environment where real estate investment can thrive.

4. Multiple Thriving Markets

Instead of being concentrated around one major city or metro (as in some states), Texas’s real estate market offers several strong options for investors to choose from.

• The energy hub of Houston
• The finance/tech center of Dallas-Fort Worth
• The tech-driven Austin area
• The culturally rich San Antonio area

Each of these markets creates sustained housing demand, but in different ways.

Even smaller Texas metros are booming. For example, Lubbock and Sherman-Denison have seen double‑digit net migration and construction growth in recent years.

The takeaway: Geographic and market diversity allows Texas real estate investors to diversify risk while benefiting from statewide growth.

5. Relative Affordability

Texas home prices and living costs remain lower than in many housing markets, especially pricier coastal regions.

As of early 2025, median home prices in major Texas counties (about $320K in Houston’s Harris County, $360K in Dallas County) are far below those in California or New York.

Here are the current median home prices, as of fall 2025:

• Texas: $305,500
• United States: $368,581

Additionally, the Lone Star State offers a better rent-to-price ratio compared to many overheated markets.

The takeaway: Affordability continues to attract new residents and investors seeking value, which supports housing demand and price stability.

6. Infrastructure and Development Growth

Texas has invested heavily in roads, transit and new housing to keep pace with steady growth and demand. Major highway expansions and public-transit projects increase connectivity and property values.

Home builders have responded as well. From 2020 to 2024, Texas issued over 780,000 new single-family home permits (a 40.9% jump). This construction boom helps meet demand and also demonstrates builder confidence in the long-term market outlook.

The takeaway: Ongoing investments in housing and infrastructure signal long-term growth and rising property values across the state.

Potential Drawbacks to Consider

Overall, Texas can be a great state for real estate investors, especially those interested in purchasing long-term rental homes for recurring income.

But there are some potential challenges to be aware of, as well:

1. High Property Taxes and Insurance

As mentioned, Texas does not charge a state income tax. But this forces the state to rely on higher local property taxes, shifting the burden to homeowners.

Homeowners in Texas generally pay 1.6% to 2% of a property’s value in taxes annually. This is significantly higher than the national average, which is typically around 1.0%.

Home insurance costs can also be significant, especially in storm-prone areas of the state such as the Gulf Coast.

2. Risk of Natural Disaster

Many parts of Texas face weather-related risks that can affect home values. Gulf and coastal regions, in particular, are subject to hurricanes and flooding that can damage houses and increase insurance costs.

Interior parts of Texas can experience severe heat, drought, or occasional tornadoes. In extreme cases local home prices can decline after disasters. Investors and buyers should consider these location risks and associated maintenance or recovery costs.

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