May 21, Pia Orrenius, senior economist at the Federal Reserve Bank of Dallas and a senior fellow at the SMU Dallas Texas-Mexico Center along with co-author Madeline Zavodny (North Florida), for an analysis of the pandemic impact on Texas migration and employment. Published in the Dallas Morning News under the heading Pandemic showed the way for remote workers and they are moving to Texas: https://tinyurl.com/y396wy46

The rapid rise of work-from-home and remote schooling during the pandemic prompted mass relocation to areas with more affordable housing, desirable amenities and proximity to family.

Texas was the destination of many of those movers. Despite a drop in Americans’ mobility overall during the first year of the pandemic, Texas gained residents from other states, and those increases accelerated through 2022. And while net international migration to Texas also fell during the early phases of the pandemic, it too came roaring back by 2022.

At least 350,000 migrants relocated from other states. Rising housing costs may slow this trend.

By Pia Orrenius and Madeline Zavodny

The rapid rise of work-from-home and remote schooling during the pandemic prompted mass relocation to areas with more affordable housing, desirable amenities and proximity to family.

Foremost among the likely underlying factors were housing costs, which tended to be lower in Texas than in other large states, particularly California and New York. The median price of homes available for sale in January 2020 — before the start of the pandemic — was almost $550,000 in California and $465,000 in New York, compared with only $285,000 in Texas, according to Realtor.com data. While earnings also tend to be higher in states with higher housing costs, they often do not fully compensate for differences in cost of living.

Tracking new arrivals

Data from the American Community Survey on the number of people who moved across states during the previous 12 months indicate that a rise in interstate arrivals was the key factor behind Texas’ increase in net domestic migration. Texas recorded 20 interstate arrivals per 1,000 total population in the 2021 survey, well above its rate of 18 per 1,000 people in the 2020 survey. The state’s domestic out-migration rate held constant at 15 per 1,000 people in the 2020 and 2021 surveys.

Working from home

The move to suburban areas coincided with rising numbers of people able to work from home. Interstate migrants, both to Texas and elsewhere, were more likely than non-movers to work from home even before the pandemic, but the share working from home rose considerably more among interstate migrants than among non-movers during the pandemic. A growing gap in work-from-home between interstate migrants and non-movers suggests that the ability to work remotely increases interstate mobility.

Those able to work remotely were also more likely to choose Texas. Even before the pandemic, 10% of interstate movers who chose Texas as their destination worked from home versus 8% of interstate movers who went elsewhere.

Indeed, Dallas-Fort Worth gained the most residents of any major metro area, while Houston and Austin came in third and fourth place, respectively, behind Phoenix.

Personal reasons

The share of interstate migrants to Texas who reported housing- and family-related reasons for moving to the state rose substantially in the Current Population Survey’s Annual Social and Economic Supplement in 2021. The share of Texas domestic in-migrants who gave a housing-related reason — such as wanting to buy instead of rent, wanting better housing or wanting cheaper housing — for moving to Texas within the past 12 months was 22% in 2021, well above the state’s pre-pandemic average of 14%.

Free to move

Migration is an important adjustment mechanism for market economies. Movement of workers, whether within a country or across international borders, helps ease labor shortages in booming areas and fill critical skill gaps that otherwise would slow economic growth. Clearly, Texas is better off when it attracts workers with in-demand abilities.

That may get harder to do in the future.

Pia Orrenius is a vice president and senior economist at the Federal Reserve Bank of Dallas and a senior fellow at the Southern Methodist University Texas-Mexico Center. Madeline Zavodny is an economics professor at the University of North Florida. The views expressed here are solely those of the authors and do not reflect those of the Federal Reserve Bank of Dallas or the Federal Reserve System. They wrote this column for The Dallas Morning News.