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Tuesday, July 09, 2013
DFW Sees Burst of New Home Construction
As the home industry rebounds, Dallas-Fort Worth home builders are back in business putting up 5,861 new homes, which is a nearly 27 percent jump year over year.
In the past 12 months, North Texas builders put 20,339 new homes on the ground.
Even though there's a surging demand for new homes, builders are constrained by shortages of skilled labor and rising prices in certain construction materials, said Ted Wilson, principal with Residential Strategies Inc., which tracks and measures North Texas' residential market.
"The home building industry has experienced significant price increases during the past year," Wilson said. "Builders have had to digest higher construction and lot costs. Many of those costs have been passed on to the consumer this past quarter in the form of price increases."
Over the past year, the median home prices increased by more than 8 percent to nearly $250,000, according to the data. New home sales also climbed during the second quarter, with builders closing on 4,978 units, a 25 percent increase year over year.
With land and lot prices in "A" quality markets soaring over recent quarters, builders are looking elsewhere to secondary markets, Wilson said.
Wilson says he doesn't expect rising mortgage rates -- last reported at 4.29 percent -- to impact the housing market because the rates are still historically attractive.
However, the rising interest rates are expected to slow price increases in the next year, saidDavid Brown, regional director for Metrostudy's Dallas-Fort Worth office, which also released its second quarter housing report.
The impact: Home buyers weakened purchasing power could trend towards a demand for lower priced homes.
"Buyer's purchasing power has weakened somewhat in the past two months and will further erode if mortgage rates continue to rise," Brown said.
Brown says he still feels construction activity will continue to grow over the next two years because of low inventory of new and existing homes in the region, coupled with strong job and population growth.