Texas A&M research economist says Texas growth fueled by fiscal policy, housing and remote-work flows; warns of hiring and tariff risks

Dr. George Barrow of the Texas Real Estate Research Center presented an economic briefing to the Texas Real Estate Commission on May 5, outlining recent growth trends and risks facing Texas.

Barrow said Texas’s population growth since 2018 is roughly 10%, compared with about 4% for the United States, and that Texas real GDP grew about 25% over the same period while U.S. real GDP grew about 16%. He identified three principal contributors to Texas growth: (1) favorable fiscal policy, including the absence of a state income tax that became more attractive after federal tax changes in 2017; (2) a housing market that has produced significant supply growth so prices have not risen proportionally with population increases; and (3) labor-market changes including remote-work adoption that brought workers from higher-cost regions.

Barrow noted changing migration patterns — a post-pandemic peak in domestic migration around 2022 and a rise in international migration more recently — and he said future growth will depend on attracting people from other states and countries, which in turn depends on federal policy. He cautioned that soft data (business expectations) have recently deteriorated, with declines in expected hiring and investment reported by the Federal Reserve Bank of Dallas. On tariffs, Barrow said estimates suggest tariffs could raise new-home construction costs by $7,500 to $15,000–$20,000, and that tariff effects on interest rates via capital flows pose systemic risk to the housing market.

Barrow invited questions and offered to discuss his forecasts further with commissioners and staff.