Dallas-Fort Worth has lost its position as the top new home sales market in Texas, with Houston taking the lead for the entirety of 2024, according to a new report by HomesUSA.com.
After dominating new home sales in 2023, DFW now ranks second behind Houston, which sold more homes each month this year. In September, DFW’s three-month moving average for new home sales was 1,848, while Houston reported 1,943 sales, the Dallas Business Journal reported.
Despite losing the top spot in terms of home sales volume, DFW continues to outpace Houston in terms of the total dollar value of sales. The average price for a new home in DFW is significantly higher than in Houston, sitting at $492,129 compared to Houston’s $397,318.
Ben Caballero, CEO of HomesUSA, said this price difference is attributed to factors such as land costs, zoning restrictions, and the number of municipalities in each metro area. These challenges make building more expensive in DFW, where regulations and zoning can limit housing supply and drive up prices.
North Texas builders are feeling the effects of rising costs. Higher interest rates make it more expensive for developers to create new housing lots, which then translates to higher prices for buyers.
Jennifer Johnson, CEO of Olivia Clarke Homes, told the DBJ that the steady stream of new residents into DFW is exacerbating the region’s housing shortage. Despite efforts to keep up with demand, rising regulations and costs continue to squeeze builders and buyers alike.
While new home sales in DFW have increased by 5% compared to last year, prices have dropped slightly from 2023 levels. In September, the average price of a new home in DFW was more than $8,000 lower than the same time last year, though prices did tick up slightly compared to August.
Meanwhile, DFW’s inventory of new homes has grown, with active listings increasing by over 26% year-over-year.
The broader Texas housing market is also seeing mixed signals. Pending new home sales have declined across three of the state’s four major markets, including DFW, where they fell for the fifth straight month.
Rising mortgage rates have contributed to this slowdown, with rates now above 6.5% despite a recent cut in the federal interest rate.
Building permits also show a varied picture across the DFW suburbs.
Cities like McKinney, Frisco, and Sherman have seen a surge in building permits issued this year, while other areas such as Denton and Prosper have experienced a decline in new home construction activity.
As developers and builders navigate these challenges, the future of the North Texas housing market remains uncertain.
This article was written with the assistance of artificial intelligence.