McAllen-Edinburg-Mission, TX
**The cap rate winner of the queue.** McAllen runs P/I **2.37 affordable**, R/I **24.3% comfortable**, **cap proxy 6.67% SOLID** (one of only two T5 metros above 6%), HPI +56.8% over 5yr, on a **$124K median (cheapest in queue)**. Permits **7.96/1k strong** (+11.1% YoY). Single-county Hidalgo. Migration −113 essentially flat. The Rio Grande Valley border metro — anchored by binational trade, agriculture, healthcare, and the new South Texas tech corridor.
The numbers that matter most
What an investor checks first when sizing up a new metro — affordability ratio, rent vs income, cap rate proxy, and where the market is moving. Each metric shown vs. state and national medians for instant context.
affordable
Price to income
2.37×
The single most-cited 'is this market still cheap' check. Below 3× and you're in an affordability tailwind.
- vs Texas
- 2.95×-0.58
- vs U.S.
- 3.43×-1.06
Benchmark
ACS median home value ÷ median HHI
comfortable
Rent to income
24.3%
What share of a typical household's income goes to rent. Below 30% means tenants can absorb modest rent increases.
- vs Texas
- 23.2%
- vs U.S.
- 23.3%
Benchmark
(HUD FMR 2BR × 12) ÷ median HHI
solid
Cap rate proxy
6.7%
Rough first-pass yield assuming a 35% expense ratio. Not an underwriting number — a 'is this even worth modeling' filter.
- vs Texas
- 5.1%+1.6
- vs U.S.
- 4.4%+2.3
Benchmark
(FMR 2BR × 12 × 0.65) ÷ ACS median home value
shrinking
Net migration
-0.01%
Forward-looking demand signal. Positive net migration drives rent growth and absorbs new supply.
- vs Texas
- 0.01%
- vs U.S.
- 0.04%
Benchmark
IRS net migration ÷ population
pipeline accelerating
Permit pipeline
7.96
permits per 1,000 residents
Forward-supply indicator. Above ~5 means the metro is building meaningfully relative to its size; below 2 means supply is tight.
- vs Texas
- 5.04+2.92
- vs U.S.
- 3.49+4.48
Benchmark
Census BPS permits TTM ÷ population × 1,000
softening
Unemployment
—
Tighter unemployment means higher wages, more rental demand, lower vacancy.
- vs Texas
- 3.6%
- vs U.S.
- 4.0%
Benchmark
BLS LAUS, latest month
Section index — click any row to jump
What the data says about McAllen
McAllen is the cap rate winner of the queue. Across 1 county — Hidalgo County (the entire metro is the county and the county is the entire metro) — the metro packs 873,167 residents with a household income of $52,281 (Census ACS) and a median home value of $124,000 — the cheapest median home value of any T5 metro in the queue. The HUD Fair Market Rent for a 2-bedroom is $1,060 — also the cheapest. The House Price Index ran +56.8% over five years (FHFA HPI) — top-tier Sun Belt territory, beating the U.S. metros average of +34.3% by 22 percentage points.
The interesting fact is that McAllen is the rare cap-rate-AND-appreciation winner. The price-to-income ratio is 2.37 — affordable. The rent-to-income is 24.3% — comfortable. The cap rate proxy is 6.67% — solid, one of only two T5 metros above 6% (the other is Rochester at 6.5%). Inside Texas, McAllen ranks #5 of 24 by population, #5 by permits, #2 by 5-year HPI — only Austin-tier metros beat it. Recent year-over-year HPI is +2.55% — moderate, slowing.
McAllen is a single-county metro but with substantial volume:
- Hidalgo County (873K pop, $124,000 MHV) is the entire metro. 6,951 permits TTM = 7.96 per 1,000 — 2.3x the national 3.49 and well above the Texas state median of 5.04. The relevant submarkets are inside Hidalgo: McAllen proper, Edinburg (the UTRGV main campus + county seat), Mission, Pharr, San Juan, Alamo, Donna, Weslaco, Mercedes. The dense corridor along Highway 83.
The 64% single-family / 7% 5+ multifamily / 29% 2-4 unit duplex/quad mix is unusual — the highest 2-4 unit share in the queue, reflecting the dense cross-border housing pattern. Permit YoY +11.1% — sustained acceleration. Hidalgo County is geographically the southernmost county in continental Texas, bordering the Rio Grande and the Mexican state of Tamaulipas. The growth is binational — substantial cross-border commerce and family ties between Hidalgo County and Reynosa drive demand and supply that other Texas metros don't see.
What's changing: net IRS migration is −113 returns (IRS SOI) — −0.01% of population, essentially flat. Owner-occupancy 67.6%, bachelor's-or-higher 20.3% (low — among the lowest in the queue), median age 30.3 (the youngest median age in any T5 metro), vacancy rate 12.6% (high). The labor market is anchored by DHR Health (the largest physician-owned health system in the U.S.), Doctors Hospital at Renaissance, the University of Texas Rio Grande Valley (UTRGV), South Texas College, the McAllen-Hidalgo-Reynosa international port of entry, agricultural processing (citrus, sugar, vegetables), and the maquiladora trade with Reynosa. Healthcare + education + binational trade + agriculture.
What does an investor do?
- If you're hunting cash flow: McAllen is best-in-class. 6.67% cap proxy on a $124K median is the math the queue almost never offers. The R/I 24.3% has demand headroom, the affordability is genuine, and the cheap entry means leverage works. Look at the McAllen city corridor (Las Palmas, Casa de Palmas, North 10th) and Edinburg for $80K-$120K SFR.
- If you're playing appreciation: McAllen also works. +56.8% over 5 years with +2.55% YoY suggests the cycle has runway. The structural fundamentals (binational trade, UTRGV, healthcare cluster) are durable. McAllen will never compound at Knoxville rates but the cheap entry means lower-bound risk.
- If you already own here: Hold and consider adding. The 2.3x national permit pace + cross-border demand + the cap rate floor means this is one of the rare markets where the math works at any reasonable LTV.
Where prices are and where they've been
FHFA House Price Index — repeat-sales index across the metro, sized against this metro's median household income and benchmarked against the Indiana metros average and U.S. metros average.
5-year price appreciation
+56.8%
FHFA HPI · Q1 2020 → Q4 2025
+2.6% YoY
$124,000 median home value
McAllen home prices climbed 56.8% over the last 5 years according to the FHFA repeat-sales index — a steady appreciation pace for a Midwest metro of this size. The 1-year change of 2.6% suggests steady appreciation continuing.
See the chart below for how the metro's appreciation curve stacks up against the Indiana metros average and the U.S. metros average. The gap between the metro and the national line is the "catch-up" or "lag" signal — and the slope tells you whether the gap is widening or closing.
How to read it
- 01McAllen ran **+56.8% over five years** — top-tier Sun Belt territory, beating the U.S. metros average (+34.3%) by **22 percentage points**.
- 02**Recent YoY is +2.55%** — moderate, slowing. Like most Sun Belt metros, the post-2022 cooldown is here.
- 03Inside Texas, McAllen ranks **#2 of 24** for 5-year HPI — only Austin tier metros beat it. **#5 by population, #5 by permits**.
- 04U.S. metros ran **+34.3%** over the same window. McAllen outperformed by ~22 points — sustained on the cheapest base in the queue.
- 05The takeaway: McAllen is the **rare cap-rate-AND-appreciation winner** — +56.8% over 5yr alongside a 6.67% cap proxy on a $124K median. The Rio Grande Valley arbitrage.
Where the value tier sits — top 1 counties by home value
| County | Median home value | Median HHI | Price-to-income | Verdict |
|---|---|---|---|---|
| Hidalgo County | $124,000 | $52,281 | 2.37× | affordable |
How to read the FHFA House Price Index
FHFA HPI is a repeat-sales index — it tracks the price change of the same properties over time, smoothing out new construction and luxury transactions. It's built from the mortgage data the GSEs (Fannie Mae, Freddie Mac) already see, which makes it free of MLS survey error and immune to listing-feed gaps.
- 01Repeat-sales method. Tracks the same properties over time, so new construction and luxury transactions don't skew the trend.
- 02Federally sourced. Built from GSE mortgage data — no MLS survey error, no commercial license required to publish.
- 03Slope, not level. Watch the slope of the line, not the absolute index value — a steepening curve is a more reliable buy signal than the level.
The rent ladder
HUD Fair Market Rent by bedroom count, sized against this metro's median household income and benchmarked vs Indiana and the U.S.
Typical 2-bedroom rent
$1,060
/ month · HUD FMR FY 2026
24.3% of median HHI
A typical 2-bedroom in costs the median household 24.3% of their income — 1.1 points above the U.S. average (23.3%) 1.1 points above Texas (23.2%).
HUD calls anything above 30% "rent-burdened." This metro sits comfortably under that line, which means tenants can absorb modest rent increases — and landlords have headroom on rent hikes before pushing tenants out of the market.
Fair Market Rent — by bedroom count
| Bedroom | Monthly | Annual | % of median HHI | Verdict |
|---|---|---|---|---|
| 1 BR | $847 | $10.2K | 19.4% | comfortable |
| 2 BR | $1,060 | $12.7K | 24.3% | comfortable |
| 3 BR | $1,376 | $16.5K | 31.6% | rent-burdened |
Why HUD Fair Market Rent matters
FMR is HUD's 40th-percentile rent estimate by bedroom count — refreshed every fiscal year, sourced from Census surveys (not commercial listing data), and used as the cap for Section 8 voucher payments. Three things investors should know:
- 01Defensible benchmark. Federal source, no commercial license required to publish or compare against.
- 02Section 8 ceiling. A property at or below FMR is voucher-eligible — government-paid rent at the FMR cap.
- 03Conservative estimate. 40th percentile means more than half of actual market rents in the metro come in higher.
Labor market direction
U.S. Bureau of Labor Statistics — LAUS (unemployment) + CES (nonfarm employment), benchmarked against the U.S. average.
Unemployment rate
—
BLS LAUS · latest month
McAllen's labor market is softening, with unemployment running at —.
For an investor, tighter unemployment means higher wages, more rental demand, and lower vacancy. The trend chart below shows how the metro's unemployment has moved over the last 30 months.
Unemployment rate
—
Nonfarm jobs
—
Median household income
$52,281
ACS 5-year
How to read the labor market
Two BLS series tell you almost everything you need about a metro's labor market: LAUS (unemployment, refreshed monthly) and CES (nonfarm payroll counts, refreshed monthly). LAUS is the tightness signal; CES is the size and direction signal.
- 01Unemployment is rental demand. Tighter labor markets mean higher wages and lower vacancy — landlords have pricing power when employers are competing for workers.
- 02YoY change is the trend signal. A negative pp YoY change means the labor market tightened over the last year — usually a leading indicator for rent growth.
- 03Nonfarm growth is supply absorption. Positive nonfarm payroll growth absorbs new housing supply and supports the rent + price trajectory together.
What's being built
U.S. Census Bureau, Building Permits Survey — trailing 12 months, broken out by structure type, with the YoY change as the directional signal.
Total permits TTM
6,951
Census BPS · trailing 12 months
+11.1% year-over-year
7.96 permits per 1,000 residents
McAllen pulled 6,951 building permits over the trailing 12 months, a meaningful jump 11.1% year-over-year. That works out to 7.96 permits per 1,000 residents, vs the U.S. metros average of 3.49.
Single-family vs multifamily mix matters: 5+ unit permits are lumpy (developers file for entire projects at once), while single-family permits are smoother and more reliable as a demand signal. The chart below breaks out the monthly mix.
Single family
4,463
trailing 12 months
2–4 unit
1,996
trailing 12 months
5+ unit
492
trailing 12 months
How to read the supply pipeline
Census BPS publishes building permit counts every month at the county level, by structure type. Single-family permits are the smooth signal — they reflect ongoing builder demand. 5+ unit permits are lumpy and project-level — one apartment approval can spike a month.
- 01Permits per 1,000 residents. The size-adjusted comparison number. Above ~5 means the metro is building meaningfully relative to its population; below 2 means supply is tight.
- 02YoY change is the direction. Year-over-year change in TTM permits tells you whether builders are leaning in or pulling back. Watch this number for trend reversals.
- 03Mix matters for cap rates. Heavy 5+ unit permitting tends to compress cap rates; single-family-dominated pipelines preserve them.
All 1 counties, ranked by population
Census Bureau (population, ACS demographics) + Census Building Permits Survey.
How to read it
- 01**Hidalgo County is the entire metro** — 873,167 residents, 6,951 TTM permits = 7.96 per 1,000.
- 02McAllen is a **single-county metro** but with substantial volume — like a small Sun Belt powerhouse compressed into one county.
- 03**64% single-family / 7% 5+ multifamily / 29% 2-4 unit duplex/quad mix** — the **highest 2-4 unit share in the queue**, reflecting the dense cross-border housing pattern.
- 04McAllen runs **7.96 permits per 1,000 residents** — **2.3x the national 3.49** and well above the Texas state median of 5.04.
- 05**Permit YoY is +11.1%** — sustained acceleration. The Rio Grande Valley keeps building.
How to read the map
- 01**Hidalgo County (the entire metro) at 7.96 per 1,000** — well above the national 3.49 and the Texas state median 5.04.
- 02Single-county metros compress the visualization — **the relevant submarkets are inside Hidalgo County**: McAllen proper, Edinburg (the UTRGV main campus + Hidalgo County seat), Mission, Pharr, San Juan, Alamo, Donna, Weslaco, Mercedes.
- 03**Edinburg and McAllen proper** are where most master-planned new construction happens — the dense corridor along Highway 83.
- 04Hidalgo County is geographically the southernmost county in continental Texas — it borders the Rio Grande and the Mexican state of Tamaulipas.
- 05**The growth is binational** — substantial cross-border commerce and family ties between Hidalgo County and Reynosa, Tamaulipas drive demand and supply that other Texas metros don't see.
| # | County | Population | Median HHI | Home value | Permits TTM | YoY |
|---|---|---|---|---|---|---|
| 1 | Hidalgo County | 873,167 | $52,281 | $124,000 | 6,951 | +11.1% |
Similar metros nationally
5 metros closest to McAllen by population and median household income — head-to-head on the metrics that matter for an investor.
Peer set
5
metros nearest by population + HHI
Best in 2 of 3 comparable metrics
McAllen is closest in size to El Paso, Greensboro, Columbia, Lakeland. best in class on Cap rate proxy, Price to income.
The table below ranks every metric — green cells mark the best value in the column, rust cells mark the worst. McAllen is highlighted as the focal row.
| Metro | Pop | Med HHI | Home value | P/I | Cap proxy | HPI 5y | Permits/1k | Migration | Unemp |
|---|---|---|---|---|---|---|---|---|---|
★McAllen | 0.87M | $52K | $124K | 2.37× | 6.7% | +56.8% | 7.96 | -0.01% | — |
El Paso, TX | 0.87M | $59K | $167K | 2.84× | 5.6% | +56.7% | 2.37 | -0.14% | — |
Greensboro-High Point, NC | 0.78M | $63K | $208K | 3.29× | 5.0% | +63.9% | 5.12 | +0.07% | — |
Columbia, SC | 0.83M | $66K | $213K | 3.23× | 4.7% | +60.4% | 0.82 | +0.07% | — |
Lakeland-Winter Haven, FL | 0.74M | $64K | $240K | 3.77× | 4.9% | +55.3% | 9.90 | +1.64% | — |
Bakersfield, CA | 0.91M | $68K | $311K | 4.59× | 3.7% | +48.5% | 3.25 | +0.02% | — |
How to read this comparison
Peer metros are picked by population + median household income — the closest five matches nationally — so the comparison is apples-to-apples on size and economic class. Sun Belt entrants like Las Vegas and Nashville are included when they fall in range, which is why this peer set spans both the Midwest and the Sun Belt.
- 01Green = best in column. The cell with the most-favorable value for that metric, accounting for whether higher or lower is better.
- 02Rust = worst in column. The cell with the least-favorable value. Combined with the green markers, this is your at-a-glance "where does my metro win and where does it lose."
- 03Cap proxy is the yield lens. Cap rate proxy = (FMR 2BR × 12 × 0.65) ÷ median home value. A first-pass yield filter, not an underwriting number — but it puts the peer set on a single comparable scale.
Where people are moving in from
IRS Statistics of Income — Tax Year 2022. Excludes intra-metro suburban churn.
Net migration
-113
tax returns · IRS SOI · TY 2022
-0.01% of metro population
995 from top origin
McAllen was essentially flat on net IRS migration — losing −113 returns, −0.01% of population. The traditional cross-border family-and-trade pattern keeps household formation steady without strong domestic inflow. Migration isn't the engine here — supply and price growth are.
The IRS data lags by ~2 years (households file taxes the year after they move), but it's the only nationwide county-to-county migration data sourced from administrative records, not survey estimates. The table below shows the top origin counties — the gravitational sources of new residents.
Top origin counties — where new residents are coming from
| Origin county | Tax returns |
|---|---|
| Cameron County, TX | 995 |
| Bexar County, TX | 575 |
| Harris County, TX | 560 |
| Starr County, TX | 365 |
| Travis County, TX | 267 |
| Nueces County, TX | 181 |
Who lives in McAllen
U.S. Census Bureau · American Community Survey 5-Year Estimates · 2019–2023 vintage.
Who lives here
- Median age
- 30.3
- Owner-occupancy
- 67.6%
- Bachelor's+
- 20.3%
McAllen young Midwest metro: Median age 30.3, 67.6% owner-occupancy 20.3% holding a bachelor's degree or higher. Stable, educated, and mostly homeowner-driven.
The catch: 44.2% of renter households are rent-burdened (paying 30%+ of income on rent) — high enough to flag as a constraint on rent growth even though the headline rent-to-income ratio looks comfortable.
- Median household income
- $52,281
- Median age
- 30.3
- Bachelor's+ degree
- 20.3%
- Owner-occupancy rate
- 67.6%
- Vacancy rate
- 12.6%
- Rent burdened (30%+)
- 44.2%
Data sources
| Metric | Source | Type | Vintage |
|---|---|---|---|
| Home prices | FHFA — House Price Index | Index | Q4 2025 |
| Fair market rents | HUD — Fair Market Rents | Administrative | FY 2026 |
| Unemployment rate | BLS — Local Area Unemployment Statistics | Survey | Dec 2025 |
| Nonfarm employment | BLS — Current Employment Statistics | Survey | Dec 2025 |
| Building permits | Census — Building Permits Survey | Survey | Mar 2026 TTM |
| Migration flows | IRS — Statistics of Income, Migration Data | Administrative | Tax Year 2022 |
| Demographics | Census — American Community Survey 5-Year | Survey | 2019–2023 |
| Household income | Census — American Community Survey 5-Year | Survey | 2019–2023 |
Page last refreshed: April 9, 2026