KB Home's Expansion into Converse, Texas: A Strategic Play in the High-Growth Housing Market

The housing market in the Sun Belt has long been a magnet for developers and investors, driven by demographic shifts, economic resilience, and a business-friendly environment. KB Home's recent foray into Converse, Texas—a suburb of San Antonio—positions the company to capitalize on these dynamics, particularly in the affordable housing segment. While the market faces short-term headwinds like oversupply and affordability challenges, the long-term fundamentals of Sun Belt growth remain robust, offering a compelling case for strategic investment.

Sun Belt Growth: A Magnet for Migration and Jobs

The Sun Belt's appeal is rooted in its ability to attract both residents and businesses. Texas alone added over 560,000 new residents in 2024, pushing its population toward 31 million and reinforcing its status as a top destination for domestic migration Sunbelt Housing Markets - What’s Really Happening?^[1]. This influx has been fueled by job creation, with Texas and Northern Florida posting annualized job growth rates of 1.3% and 1.4%, respectively, in 2025 Sunbelt Housing Markets - What’s Really Happening?^[1]. For Converse, proximity to employment hubs like Amazon's regional distribution center and Randolph Air Force Base further amplifies its attractiveness Converse, Texas Affordable Housing - Hud Housing Network^[2].

However, this growth has outpaced housing supply. Median home prices in Texas surged by 40% between 2019 and 2023, while mortgage rates hit a 23-year high, limiting access to homeownership Sunbelt Housing Markets - What’s Really Happening?^[1]. The result? A persistent affordability gap. In Converse, median home prices hover around $325,000, with property taxes averaging $7,150 annually for a $325,000 home Converse, Texas Affordable Housing - Hud Housing Network^[2]. For renters, 2BR apartments command $1,300–$1,800 per month Converse, Texas Affordable Housing - Hud Housing Network^[2]. These figures underscore a market where demand for affordable options is acute.

Short-Term Challenges: Oversupply and Cooling Demand

The Sun Belt's rapid development has led to a temporary oversupply, particularly in the multifamily sector. In 2025, rising inventory levels in high-growth cities like Austin and North Florida have pressured prices, with some areas seeing a 9.62% drop in Converse's median home price year-over-year Converse Housing Market: House Prices & Trends | Redfin^[3]. Homes now take an average of 85 days to sell, up from 39 days in 2024 Converse Housing Market: House Prices & Trends | Redfin^[3]. This cooling reflects a shift in buyer behavior: demand has become more deliberate, with households prioritizing value over speculation.

Yet, these challenges are not insurmountable. The Sun Belt's long-term fundamentals—driven by migration, job creation, and a pro-development regulatory environment—remain intact Sunbelt Housing Markets - What’s Really Happening?^[1]. For instance, Austin's population grew by 2.4% in 2024, three times the national average Sunbelt Housing Markets - What’s Really Happening?^[1]. Converse, as part of the San Antonio metro, benefits from this broader trend but faces localized hurdles in aligning supply with demand Converse Housing Market: House Prices & Trends | Redfin^[3].

KB Home's Strategic Play: Affordable Housing and Value-Added Opportunities

KB Home's entry into Converse is well-timed to address the affordability crisis. The city currently has only three affordable housing complexes—Converse Ranch, Converse Ranch II, and Town Square Apartments—offering 252 low-income units Converse, Texas Affordable Housing - Hud Housing Network^[2]. This scarcity highlights a critical gap in the market, particularly for first-time buyers and middle-income renters. By focusing on affordable housing, KB Home can tap into a segment with strong demand while aligning with federal and state incentives aimed at addressing housing shortages Converse, Texas Affordable Housing - Hud Housing Network^[2].

Moreover, the company can leverage Sun Belt-specific strategies. For example, developers are increasingly prioritizing value-added properties and optimizing micro-markets where demand persists Sunbelt Housing Markets - What’s Really Happening?^[1]. Converse's proximity to San Antonio's urban core and its appeal as a suburban alternative make it an ideal candidate for mixed-use developments that blend affordable housing with commercial and retail spaces.

Risks and Mitigation

KB Home's strategy is not without risks. High construction costs and regulatory scrutiny in Sun Belt markets could delay projects. Additionally, the current oversupply may require patience to absorb newly built units Sunbelt Housing Markets - What’s Really Happening?^[1]. However, these challenges are temporary. As noted by Dominion Financial Services, the Sun Belt's recalibration is an opportunity for “well-informed investors” to acquire assets at discounted prices while positioning for long-term growth Sunbelt Housing Markets - What’s Really Happening?^[1].

Conclusion: A Calculated Bet on Sun Belt Resilience

KB Home's expansion into Converse reflects a nuanced understanding of Sun Belt market dynamics. By targeting affordable housing—a segment with structural demand—and leveraging the region's long-term growth drivers, the company is poised to thrive despite short-term volatility. For investors, this move underscores the importance of aligning with markets where fundamentals outpace cyclical headwinds. As the Sun Belt continues to redefine the U.S. housing landscape, Converse represents a strategic foothold in a story of resilience and reinvention.