HOUSTON – (Realty News Report) – Shaking off the Covid-inspired doldrums earlier this year, Houston’s new home construction has bounced back this summer, according to new statistics from Metrostudy.
In the second quarter, the Houston area recorded 7,718 new-home construction starts, up 3 percent from the second quarter of 2019, Metrostudy reported.
“Things change real quickly,” said Lawrence Dean, Houston regional director for Metrostudy, which provides housing market data to builders and developers.
Home sales are being driven by record low mortgage rates, which have been hovering in the 3 percent range. Last week the nation’s 30-year fixed-rate mortgage averaged 2.96 percent, down from 3.6 percent a year earlier, according to Freddie Mac.
“Homebuyer demand remains strong, especially for those in search of an entry-level home where the improvement in affordability via lower mortgage rates has a material impact,” said Sam Khater, Freddie Mac’s Chief Economist. “Even with this week’s uptick, very low rates are providing a significant boost to the housing market that continues to hold up well during this time of uncertainty.”
Record Housing Start Forecast?
If mortgage rates remain low and the Houston economy remains stable or in gradual recovery, Houston could end 2020 with as many as 31,500 housing starts, according to the new Metrostudy forecast. Achieving record high housing starts given the massive job losses – Harris County has recorded over 500,000 unemployment claims this year – would be remarkable.
In the “worse-case” scenario, Houston could end the year with 28,000 starts, a 3 percent decline, Metrostudy said. That will occur if jobs losses increase, mortgage rates rise, or shortage of lots develops.
Houston’s existing home sales surged in July. Some 11,000 homes were sold in Houston in July, a record-high that was 23 percent over the sales total of July 2019. It was the first time a monthly sales total has surpassed 10,000, the Houston Association of Realtors reported. The inventory of existing homes is exceptionally low, a trend that pushes homebuyers to seek out home builders.
Texas remains far ahead of other states in homebuilding. Dallas and Houston are the top two markets in the nation in single-family starts.
Austin ranks No. 6 in housing starts and San Antonio ranks No. 11.
Texas has attracted businesses, such as Charles Schwab, that seek a corporate headquarters with lower tax rates and a business-friendly environment.
Tesla recently acquired 2,000 acres in east Austin where it is building an 5 million-SF electric pickup truck factory with 5,000 employees.
Houston shows a 10.5 percent gain in annual housing starts as builders started 32,300 homes in the 12-month period ending June 30. The 10.5 percent gain was registered despite the downturn caused by the coronavirus outbreak.
DR Horton, which is based in Arlington, Texas, is the largest builder in the nation and in Houston.
DR Horton led Houston builders with 830 second quarter home starts, follow by Lennar with 424 and Perry with 386, Metrostudy said.
DR Horton, which builds with the DR Horton, Express, Freedom and Emerald brands, commands a 12.6 percent market share in Houston. Lennar is No. 2 with a 7.8 percent Houston market share, Metrostudy reported.
Bridgeland, a master-planned community by Howard Hughes Corp., is the leading community for new home sales in the Houston area.
Aug. 17, 2020 Realty News Report Copyright 2020
File: Houston Home Building Rebounds. File (2): Houston Home Building Rebounds with 3 percent gain in second quarter
Photo: Ralph Bivins, Realty News Report Copyright 2020
