HOUSTON – (By Ralph Bivins for Realty News Report) – Houston led the nation in single-family home building in 2024 with over 50,000 building permits, but a leading market analyst says it will be hard to maintain the building boom in 2025.
The Houston metro area was well ahead of the pack last year, as population and job growth stimulated demand.
National leader Houston recorded 52,851 single-family building permits in 2024, followed by Dallas with 47,045 and Phoenix with 30,166.
Lone Star State Shines
Also in the leadership pack was No. 6 Austin with 16,521 single-family building permits and No. 17 San Antonio with 10,916 last year.
However, home builders are facing some headwinds as 2025 begins.
With mortgage rates hovering around 7%, affordability is a challenge to homebuyers. And the inventory of existing homes for sale remains tight, which is a barrier to price decreases. Questions remain about pricing for building products amid possible tariff increases, and new migration policies could impact labor availability.
Forecast: Houston’s Single-Family Starts will Decline Slightly in 2025
Houston housing consultant Lawrence Dean, president of Community Builders Advisory Services, is projecting a decline between 2% and 6% in local housing starts in 2025.
But after the uber-healthy 41,927 single-family starts of 2024, the modest slide in 2025 will not be anywhere near catastrophic, Dean told a crowd at the Greater Houston Builders Association annual economic forecast luncheon last week
“Our forecast for the calendar year of 2025 is that by the end of the year we should have between 39,000 and 41,000 new home starts. That is slightly fewer than 2024. But it is well above the long-term average,” Dean said
Custom home builders, which appeal to buyers who aren’t as mortgage rate sensitive, should have a good year, Dean said.
Many high-volume builders, always nimble, are increasing market share with mortgage buy-downs. Some of the buy-downs function like adjustable-rate mortgages with a 3.9% rate in year one, 4.9% in year two and 5.9% percent in year three, for example.
As the nation awaits details on tariffs, mass deportation, and higher-for-longer interest rates, there will be plenty of uncertainty in the first half of this year.
However, Houston retains a good chance to be No. 1 in single-family home building again this year, even with activity cooling slightly.
Can’t Get a Building Permit? … Mayor Whitmire Says He’s Here to Help
After repeatedly hearing builders and developers say heavy red tape and slow procedures discouraged them from building inside the jurisdiction of Houston, Mayor John Whitmire says he decided to take action
“I listen to you!” the mayor told the Greater Houston Builders Association audience. The mayor says he made changes at City Hall and named Vonn Tran as the city’s new Planning and Development Department Director.
“We’re open for business,” Whitmire told the builders. “If you have any other issues, I want to know about it.”
Feb. 4, 2025 Realty News Report Copyright 2025
Photos: Cynthia Lescalleet, CALpix. Copyright 2025, Realty News Report
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File: Houston Leads US in Home Building – But what about 2025?