Lubbock Economic Analysis

Continued strength in retail sales remains a key driver of the Lubbock economy.

Total building activity YTD is modest, with residential activity still showing declines in both volume and number of permits. Vehicle sales and tourism have improved, while employment is holding steady. Interest rates remain elevated, and the cost of capital, along with uncertainty around long-term rates, continues to be a concern.

YTD retail sales are up 8%, while July 2026 sales increased 17% compared with July 2025. Both new and used vehicle sales improved, increasing 35% and 13%, respectively.

Hotel/motel tax collections continue to show a steady increase in July 2026, increasing 8% from July 2025, driven by more summer concerts and summer youth sporting events.

Employment in Lubbock remained flat compared with July 2025. The unemployment rate increased to 4.4%, up from 4.0% a year ago, while wages rose 9% over the same period.

Mortgage rates, near 7%, remain higher than this time last year. As a result, residential permitting activity decreased 31% from July 2026, while median home prices declined 15% compared with the same period last year.

Total residential activity continues to decline YTD, down $96 million, or 22%, while single-family residential activity fell $37 million, or 11%. Last year's figures included a $29 million apartment complex and a $67 million student housing project, which account for much of the difference.

Total building activity remains roughly in line with last year, with YTD activity down $13 million, or 2%. A few new commercial permits were issued in July, including a new Burlington and PetSmart location on South Quaker and a new Toot'n Totum store on South Interstate 27. For the year, commercial building activity is up $83 million, or 38%.

YTD energy markets were mixed, with oil prices up 27% and natural gas prices down 4%.

Agricultural commodity prices also varied, with cotton prices increasing 26%, milk prices down 5%, and wheat prices up 21%. Cotton across the High Plains is entering a critical period, as triple-digit temperatures and limited rainfall threaten both dryland and irrigated acres. A defining factor for the 2026 crop is the uneven distribution of rainfall.