AUSTIN (KXAN) — In a new report on regional economic trends, the American Growth Project ranked Austin as the second fastest-growing city in the United States, falling behind the San Francisco Bay area. 

The researchers behind the report were interested in examining the 50 most populous metropolitan regions in the United States and measured variables such “as industry growth potential; labor flexibility and readiness; skills levels and gaps; and the urban/rural economic divide,” the report read. 

The reasons behind Austin’s high ranking are unsurprising. 

The authors cite an influx of heavy-hitting tech companies, a high concentration of venture capital, vibrant cultural offerings and a warm climate all as factors driving up Austin’s economic output and population growth. 

They acknowledge Austin’s impressive growth has come with some not-so-impressive consequences, such as ascending housing prices.

“The median home value in Austin increased from $349,156 in August 2020 to $566,479 in August 2022, with average multifamily rents rising 10% year over year,” the American Growth Project report read. 

The authors also warned Austin’s hiring boom may have already peaked and is beginning to languish, as there are signs of hiring rates slowing in the region. 

Lila Valencia, the city demographer of Austin, was not surprised by Austin’s ranking on the list. When only considering population growth, she said Austin has been the fastest-growing city in the country for the last 11 years.

In terms of jobs, Valencia did not share the same concerns as the authors of an impending hiring slump in the region. 

“I don’t see any indication of that from our latest economic reports,” Valencia said. “We are seeing that there aren’t as many new job openings, but we are seeing unemployment (is) still at very low levels (and) we still are leading in terms of job growth.”

Valencia said the growth Austin has seen in the last 10 years likely will continue into the foreseeable future. The census counted 961,855 people in 2020 and forecasts there to be 1,126,151 in 2022. 

The factors driving Austin’s population growth are unique, she said.

“The population in Austin that’s been driving growth is the non-Hispanic white population,” she said. “It attributed about 40% of the total growth, which is really unique, because across the country, and across the state of Texas, populations of color have been driving growth.”

She added this has a lot to do with the types of industries that are growing in the area. 

“When you have a lot of tech jobs, a lot of fine finance jobs or financial sector jobs, then you’re going to see workforces that are more homogenous and a little bit less diverse,” Valencia said.  “I’m hoping that we will see a return of some families of color to the city of Austin, especially as we add more housing, and as housing becomes more affordable.”

“But if things stay the way they are, and we continue this limited housing supply, and we continue to attract businesses to our area with more homogenous workforces,” she continued, “then,  unfortunately, we will be losing some diversity in our city.”