Texas’ Economic Outlook

May 30, 2022by Brian Talley

According to the Texas Real Estate Research Center, Texas’ economic outlook is “optimistic,” although inflation is a concern. All major metros rose in the Dallas Fed’s Texas Business-Cycle Index, with Dallas and Austin leading the state.

“Strong real oil prices, expectations about continued growth, and a robust Texas economy that allowed for stock-price increases of Texas-based companies, job gains over pre-pandemic levels, and increased average weekly hours worked in manufacturing, all contributed to the favorable outlook.”

Texas’ unemployment rate dropped 2.1 percent year to date to 4.8 percent, while the labor force reached an historical high with over 14.3 million available workers, for a labor force participation rate of 63.3 percent. All major metros showed improvement in unemployment rates, with Austin the lowest at 3.3 percent. Additionally, hiring accelerated in all the major metros, while hourly earnings in the private sector reached historic levels.

Residential Real Estate

The Texas Residential Construction Cycle (Coincident) Index, measuring current construction activity, decreased in Texas “due to employment dips in the industry outweighing construction gains.” However, the index measuring future activity leveled out and could increase in the coming months, according to the Center. Complicating these factors are supply chain issues and inflationary pressures.

Home refinance applications were down 37.5 percent year over year due to higher interest rates.