The cost of living is up in DFW, but is it all down to inflation?
As The Dallas Express reported earlier this month, the DFW housing market has begun to cool, but prices were still up over 20% annually at the end of the summer.
And it is not just home prices. Residents of DFW, like the rest of the country, are paying more for everything. While price growth has eased, the latest reading shows that nationwide inflation was still near record highs, growing 7.7% annually in October.
According to a ranking by Nexstar Media Wire, while slightly under the national cost of living, the DFW metropolitan area is still the most expensive place to live in the state. Utilities, in particular, are costly in DFW, roughly 10% higher than the average U.S. price.
Key to understanding the cost-of-living variances over time and place is data from the Consumer Price Index. The CPI measures the average basket of goods U.S. consumers purchase each month and tracks its changing costs.
Of course, the measure is not perfect, since everyone’s basket of goods differs. Still, it provides valuable insight into changing prices in the economy.
Places often see prices soar as demand to live in the area rises. As such, the exodus of people fleeing California to Texas during the pandemic helped drive prices in the state higher.
“Whenever the demand for a good increases faster than the supply of it can increase, that’s when you’re going to get price increases… If you can get the opposite, if you can get the supply increasing faster than the demand, then you’ll actually get price decreases,” said Bill Crowder, an economist at The University of Texas at Arlington.
Even before COVID-19, people were moving to Texas in search of relatively lower living costs. According to The Kinder Institute for Urban Research at Rice University, Texas experienced net migration of between 40,000 and 50,000 people a year to the Lone Star State from California in 2018 and 2019.
Predictably, as popularity grew, so did the prices people were initially relocating to escape.
“It’s kind of a self-fulfilling kind of thing where, as the economy gets stronger, people sort of recognize, ‘Oh there’s a strong economy in Texas’ and so they come, and that only makes the economy stronger,” explained Crowder. “The strong economy kind of feeds on itself in the sense that it attracts more people.”
Prices have also been influenced by supply chain issues that have plagued the economy in recent years. According to Michael Carroll, an economist at The University of North Texas, the slow or restricted movement of goods coupled with relatively robust consumer spending helped push prices higher around the world.
This past summer, the U.S. saw prices at the gas pump hit record highs, reaching a nationwide average of $5.02 per gallon. Dallas was slightly better off, with peak average gasoline prices reaching $4.84 this past June.
