DALLAS — Dallas-Fort Worth has lost its spot as the No. 1 new home sales market in Texas, according to a new report.
DFW led all Texas metropolitan areas in new home sales for most of 2023, but ranked second behind Houston every month in 2024, according to data from Dallas-based HomesUSA.com.
New home sales in Dallas-Fort Worth hit a three-month rolling average of 1,848 in September. That compares to 1,943 cases in the Houston metropolitan area, 1,067 cases in the San Antonio area and 864 cases in the Austin area.
HomesUSA.com’s new home sales report uses multiple listing service data from real estate agent associations in North Texas, Houston, Austin, and San Antonio.
Ben Caballero, founder and CEO of HomesUSA, said the Houston area is outpacing DFW in new home sales, but the metroplex still leads in dollar sales. said. This speaks to the relatively high cost of living in North Texas. It’s good news for homeowners, but a reminder of DFW’s affordability challenges.
The average sale price of the 1,848 new homes sold in DFW was $492,129, for a total sale price of more than $909 million. In Houston, the average price of the 1,943 homes sold was $397,318, for a total price just shy of $772 million. As a result, homes in the DFW area are selling for nearly 18 percent more than in and around Houston, said Caballero, author of the HomesUSA report.
Caballero said reasons for the difference in home prices between the state’s two largest cities include land costs, zoning and the number of municipalities within each metropolitan statistical area.
He said there are 126 municipalities in the Dallas-Fort Worth MSA and 89 municipalities in the Houston MSA.
“The more cities we have, the more regulations and permit approvals, the more inspection delays, the more it costs to build homes,” Caballero said.
He added that some DFW cities are seeing zoning that limits the supply of new housing by restricting where homes can be built and the types of housing that can be developed. This could constrain the housing market and increase land prices in North Texas.
“In contrast, cities without zoning like Houston often have more flexibility in development, potentially increasing the supply of housing and keeping prices low,” Caballero said.
North Texas home builders say they are feeling the pinch of rising costs in the future.
Jennifer Johnson, CEO of Plano-based home builder Olivia Clark Homes, said rising interest rates have made lending conditions tougher for housing community developers in North Texas, and developers are slowing down new construction. He said the cost of clearing land to build houses is rising. Built. Those costs are passed on to builders, who then pass those increases on to buyers in the form of higher home prices, she said in a recent podcast interview with the Dallas Business Journal.
Johnson added that there has been a steady flow of people into North Texas’ already tight housing market, further increasing the demand for affordability. Olivia Clark Homes is built in high growth areas including the large Fields community of Frisco, areas of Denton to the west and McKinney to the east.
“The number of migrants continues to rise, but we are already in short supply (of housing),” Johnson said on a podcast. “We need to get back out of the red, and it shows no signs of slowing down. Unfortunately, I don’t see that happening because there are more regulations being imposed by cities and municipalities, which will increase costs. I can’t believe it.”I started to feel some peace. ”
Drilling down data in DFW
Home sales in North Texas are up more than 5% compared to a year ago, even though builders are selling fewer homes in DFW than in Houston, according to a report from HomesUSA.
Prices have been declining over the years, with September’s three-month average price of $492,129 being more than $8,000 lower than September 2023. However, last month’s average price was up slightly from August’s three-month average of $489,762.
DFW new home inventory continued to increase in September, with the three-month average of active listings increasing to 7,939 compared to 7,686 in August. DFW’s active listings increased more than 26% year-over-year from 6,277 in September 2023.
The pace of new home sales was slightly slower than ever as the overall three-month average days on market was 122 days compared to 121.14 days in August.
“Signals for new home sales in the Dallas area are mixed due to seasonal effects and continued uncertainty in mortgage rates,” Caballero said, “but the silver lining is that sales are up 5.2% compared to the same period last year. % increase,” he said.
Pending sales, a key indicator of future sales, were nearly flat last month. DFW’s average three-month pending new home sales in September was 2,266 units, compared to 2,281 units in August, a difference of 15 units. This is the fifth consecutive month that the average number of pending sales has decreased.
Caballero said one reason for this is that mortgage rates remain high.
When the Fed cut interest rates by half a percentage point in September, many expected mortgage rates to follow suit. But the opposite has happened, with mortgage rates rising by about three-tenths of a point in the past few weeks, with the average rate on a 30-year mortgage once again above 6.5%.
Caballero said a rate cut of more than 0.5 percentage points would be needed to stimulate the housing market.
“Right now it’s not enough to make a difference,” he said. “If it goes down by about two or three points, (home sales) will increase.”
Pending new home sales continued to decline in September in three of the four largest new home markets, including DFW. The total number of pending sales across the four markets in September was 6,543, compared to 6,575 in August.
In the Houston area, there were 1,926 pending new home sales in September compared to 1,957 in August. In San Antonio, the number of pending new home sales fell to 1,080 last month, compared to 1,093 in August. Austin is an exception, with 1,271 pending new home sales in September, up from 1,244 in August.
Average new home prices fell in three of Texas’ four major new home markets last month, with the exception of DFW’s 5% increase.
In Houston, the average price of a new home in September was $397,318, down from $402,741 in August. In Austin, the average price in September was $483,408, compared to $494,920 in August. The average new home price in San Antonio also fell to $338,620 in September, compared to $340,775 in August.
The number of single-family home building permits issued at the forefront of the new housing process fluctuated significantly compared to a year ago in many of Dallas’ northern suburbs, according to survey data compiled by an Addison-based research firm. was. tomlin investment.
Building permits have skyrocketed since the beginning of the year in McKinney, Frisco, Anna, Celina, Sherman, Little Elm and Van Alstyne. But permits for Denton, Prosper, Melissa, Crum and Sanger plummeted by double-digit percentages.
For example, in McKinney, the Collin County seat, permits for single-family homes jumped 36% in the first nine months of this year. The city had issued 1,709 permits through September of this year, compared to 1,259 in the same period last year.
But in Denton, the county seat, permits have fallen 27% from 848 in the first nine months of 2023 to 619 so far this year.
Here are the total single-family home permits for the first nine months of 2023 compared to the same period this year in cities tracked by Tomlin data.
• Anna: 798 permits in 2023. 1,082 people in 2024. 36% increase
• Celina: 1,879 in 2023. 2,207 people in 2024. 17% increase
• Frisco: 793 permits in 2023. 1,015 people in 2024. 28% increase
• Crum: 59 people in 2023. 23 people in 2024. 61% decrease
• Little Elm: 624 in 2023. 1,043 people in 2024. 67% increase
• Melissa: 799 people in 2023. 476 people in 2024. 40% reduction
• Princeton: 1,368 in 2023. 1,501 people in 2024. 10% up
• Prosperity: 732 people in 2023. 629 people in 2024. 14% decrease
• Sanger: 91 years old in 2023. 44 people in 2024. 52% decrease
• Sherman: 212 in 2023. 554 people in 2024. 161% increase
• Van Alstijn: 126 years old in 2023. 410 people in 2024. Increased by 225%.
