INCOME GROWTH IN TEAXS

Texas' future prosperity will derive from more people, more jobs and expanded personal income. Increases in employment will result in growth in personal, per capita, household and family incomes. Between 1980 and 2005, Texas' total personal income grew by 422.8 percent, from $142 billion to $741 billion. By first quarter 2007, total personal income was up to $841 billion. Extending the long-term trend in personal income since 1969 suggests that the state's total personal income could increase by $1 trillion by 2030. Household income would be expected to increase similarly. The 2005 Texas median household income of $42,139 could reach nearly $68,000 by 2030.
House Prices and Housing Affordability
Housing affordability may be one of the most significant growth stimulants for Texas during the first half of this century. Historically, the Texas housing market has maintained a relative balance of supply and demand despite periods of accelerated growth (the oil boom) and significant decline (the oilbust). Texas is the most housing-affordable high-growth state in the nation.
So far, skyrocketing home prices common to fast-growing states like California and Florida have not occurred in Texas. In mid-2007, the state's median-priced home ($151,000) was about two-thirds the national median ($229,000) and about 25 percent of California's median ($589,000).
The Texas Affordability Index measures the relationship between median family income and the ability to buy the median-priced home. Texas' current affordability index stands at 1.52 compared with the nation's 1.16. The index indicates that a family in Texas earning the statewide median family income has 152 percent of the income required to qualify for financing on the median-priced home. The national median family income is only 16 percent greater than the required income to purchase the national median-priced home.
A simple measure of home affordability expresses median house value as a multiple of median household income. More affordable housing is reflected by a lower multiple. The 2005 national median home value was 3.62 times the median household income. In Texas, the median home value was only 2.52 times median household income.
Current median prices to median household income multipliers are even higher, and the difference between Texas and national levels are even more pronounced. Texas' relative price-to-income ratio lags considerably behind the U.S level and the levels of the other most populous states in the country.