Thursday, January 08, 2015
D-FW home starts surged 30 percent in fourth quarter
A jump in fourth quarter home starts made 2014 the best year for home construction in the Dallas-Fort Worth area since the recession.
Builders started 30 percent more houses in the final three months of last year compared with fourth quarter 2013, according to a new report by Residential Strategies Inc.
For all of 2014, 25,902 homes were started in North Texas. That’s about a 91 percent increase in home construction since 2011.
“On an annual basis the starts were up 24 percent,” said Residential Strategies’ Ted Wilson. The builders had a really good fourth quarter.”
New home sales were 11 percent higher in the final months of last year. In 2014, North Texas homebuilders sold 21,792 homes – an increase of about 12 percent over 2013 levels.
“Everybody is clucking about how strong their traffic and sales have been,” Wilson said. “What has helped out quite a bit is that 30 year mortgage rates have edged down.”
Home financing costs have recently dipped below 4 percent.
Builders are also getting a break in construction.
“We have heard some reports that there has been an improvement in the availability of labor,” he said. “The lack of skilled construction workers has acted as a governor to the market for much of the recovery.”
The number of new houses on the market for D-FW consumers to chose from remains very low. At the end of the year there were only 3,376 finished vacant houses in North Texas, according to Residential Strategies. That’s only about a 2-month supply.
Wilson is forecasting another strong year for North Texas new home sales and construction in 2015.
He said most builders aren’t concerned about recent drops in oil prices which have fueled fears of an economic slowdown in Texas.
“There is not any near term expectation of any swoon in the business,” Wilsons said. “People in the housing industry are saying they still have all these jobs coming from Toyota and other companies.
Even with the rebound in homebuilding during the last few years, new home starts in North Texas remain almost 50 percent behind where they were in 2006 before the recession hit. Builders started more than 48,000 houses here at the peak of the market.
Home construction firms have been constrained in the recovery due to shortages of workers, building lots and tougher financing requirements.
Almost 27,000 new building lots were developed last year, compared with just 15,748 new D-FW home lots in 2013, according to Residential Strategies.
By Steve Brown, Dallas Morning News