The fastest-growing city in Texas is a tiny place no one's ever heard of

• Texas' fastest-growing city is a small spot outside Dallas called Josephine, census data shows.
• Josephine has just under 7,000 residents, and thousands of new homes are being built there.
• Some people are moving there to buy newly-built homes, which are relatively affordable, locals said.

In 2022, Cassidy Moore and her husband were searching for their first home together.

Moore — a 31-year-old former nanny who grew up on the outskirts of Dallas-Fort Worth in McKinney, Texas — said she had no desire to purchase a home in Dallas itself, where the couple would have to deal with heavy traffic and a higher cost of living.

“It's a stressor being in that type of environment,” Moore told Business Insider. “We were open to go wherever, but looking at prices and affordability. We just wanted to get in and plant our feet somewhere.”

In Josephine, a small city a 45-minute drive northeast of Dallas, the couple found what they were looking for: A quieter area with affordable homes, where they could, as Moore put it, “start fresh.”

In September 2022, the couple bought a newly built 1,600-square-foot home in Josephine for $289,000. Moore said she’d never be able to afford a home like that in Dallas where “you can't find anything under $400,000.”

According to Redfin, the median home sale price in Josephine was $355,000 in January. Dallas’ was $386,500.  

Between 2021 and 2022, Texas welcomed 670,000 new residents, ranking second only to Florida, according to Census Bureau data. Historically, large cities in Texas, such as Dallas and San Antonio, have been popular destinations for movers from both outside and inside the state, attracting them with plentiful homes and employment opportunities.

However, city and town population totals from 2020 to mid-2022 suggest that smaller cities — like Josephine and New Braunfels, between Austin and San Antonio — are stealing the spotlight. They have experienced robust population growth, while their larger counterparts have seen minimal population growth, or in some cases, outright declines. 

According to census data, Josephine is the fastest-growing city in Texas. Between 2020 and 2022, the city’s population grew from 2,131 to 6,944, a leap of 225.86%. Compare that to Dallas, where the population fell by 0.37% in that time period, and Austin, where it only increased by 1.30%.

Movers are flocking to Josephine for its relatively cheap homes, lower taxes, and proximity to Dallas while still maintaining a quiet and communal vibe, according to one recent homebuyer, a local real-estate agent, and the city administrator.

Josephine's population growth is due to a housing boom

After spending months visiting open houses at homes in several of the many big and small cities that make up the Dallas-Fort Worth metroplex, also known as DFW, Moore and her husband stumbled upon rural Josephine by chance.

“We pulled up Google Maps and my husband was like, ‘Where can we go next?’ Little Josephine popped up, and he was like, ‘What the heck is Josephine? Let's go check it out,’” she said.

Surrounded by vast farmland, crisscrossed by a network of dirt roads and two-lane streets, Josephine is a sleepy town with a population of just under 7,000. In recent years, however, its profile has grown significantly as the country's largest publicly traded homebuilder, D.R. Horton, has constructed developments with hundreds of homes throughout the area.

D.R. Horton's developments include Magnolia, where Moore purchased her home, as well as the Waverly Estates and Riverfield communities. Robbie Hale, a well-known Dallas-area homebuilder, has added a neighborhood called High Meadow Estates. 

According to Josephine’s official website, the Magnolia community is set to include about 1,600 homes initially, which its official website says are priced from $249,990 to $324,000. Meanwhile, High Meadow Estates has homes starting from $400,000.

D.R. Horton, which didn't respond to a request for comment, is building or planning to build countless developments across the country in Sun Belt states including Florida, Georgia, and Arizona.

Many of the planned developments in Texas are located outside major cities — projects like Copperas Cove, 68 miles north of Austin, and Burnet, 90 miles north of San Antonio.

The city’s low home prices are attractive to buyers 

Bonnie Hunt, a real-estate agent who is the co-owner of Texan Team Real Estate, told BI that “Josephine is exploding" because of its lower cost of living and convenient closeness to Dallas, as well as nearby McKinney and Plano. 

“Josephine is offering a lower tax rate and also home affordability,” Hunt said. “The majority of the homes in the city of Josephine are overwhelmingly priced at $300,000. There's no way you're going to find a new build at that price in McKinney or Dallas.”

Hunt said that many of her clients are millennial first-time homebuyers, like Moore, who have selected the city to jump-start their lives.  

“The new generation that's coming up, they want a brand-new house, and they don't want to live in somebody else's dirt,” she said, adding that her clients also want to live somewhere close enough to "get into Dallas for the nightlife” or drive into the city for work.

Josephine may experience growing pains

Moore told BI that as Josephine grows, she has concerns about whether its roadways can accommodate the influx of new residents.

“There's a ton of houses being built. There's more apartments being built — not just in Josephine itself, but in surrounding areas — so there's more traffic on these little roads,” she said. “It's gotten to the point where they're planning to expand the roads, which is very needed.”

The city administrator for Josephine, Lisa Palomba, told BI that the town will also need to beef up its municipal services and public safety departments to meet the needs of a growing population.

“We have to build infrastructure to increase capacity for water and sewer services,” Palomba said, adding that the city also needs to expand its police and fire departments, especially considering that the latter is staffed by volunteers.

Moore said that while she enjoys living in Josephine — which allowed her to become a homeowner in the first place — she and her husband will consider moving to a different city down the line.  

"Josephine lacks convenience in that we have to drive 20 minutes to get to the closest grocery store, and even 30 to 40 minutes for anything else," she said. "We're headed more towards McKinney and then Sherman, probably within the next year or two."