The residential construction sector in the Lone Star State started the year with a measured slowdown, according to the latest HBW Building Activity Trend Report. Through the first quarter of the year, 17,059 new residential construction permits were added to the HBW database, representing a 12% year‑to‑date decline compared to the same period in 2025.

While a double‑digit contraction may appear significant at first glance, perspective is essential. The Texas market has demonstrated notable year‑to‑year variability in recent cycles: 2025 closed with a 9% year‑over‑year decline, while 2024 posted a 10% increase over 2023. Early‑year permit activity often reflects seasonal and economic positioning rather than full‑year performance, making Q1 a directional indicator rather than a definitive forecast.

HBW’s report encompasses the state’s four major metropolitan areas (Houston, Dallas, Austin, and San Antonio), with each one exhibiting distinct market dynamics as 2026 gets underway. Here is a closer look at permit data by metro area:

Houston

Houston continues to anchor the residential construction landscape in Texas, contributing 8,128 new permits in Q1 2026; while this reflects an 11% decrease vs. Q1 2025, the total volume accounts for nearly half of all statewide activity within the four major metros. The decline aligns closely with the statewide average, suggesting Houston’s market is contracting at a controlled, predictable pace rather than experiencing structural disruption.

Dallas

Dallas recorded 5,209 new permits through Q1, marking the second‑highest volume among the metros but also the most pronounced decline (YTD Change: 25% decrease vs. Q1 2025). The pullback in the Dallas area may reflect a recalibration, as builders adjust to interest‑rate pressures, inventory normalization, and shifting demand patterns.

Austin

Austin stands out as the only major metro posting year‑over‑year growth in Q1. Through March 2026, there have been 2,136 new residential construction permits added to the HBW database for the Austin area, reflecting a 29% increase vs Q1 2025. Austin’s surge suggests renewed momentum, potentially driven by continued in‑migration, tech‑sector stabilization, and a rebound in residential development.

San Antonio

San Antonio posted 1,586 new permits, the lowest volume among the four metros but with a decline that remains in line with statewide trends (YTD Change: 10% decrease vs. Q1 2025). The area continues to demonstrate steady, predictable behavior without the volatility seen in Dallas or the acceleration observed in Austin.

County-Level Insights

A closer look at county‑level data reveals where construction activity is most concentrated and where notable year‑over‑year shifts are occurring.

Houston Area Counties

• Harris County: 3,266 permits | 23% decrease vs. Q1 2025 – A sharper decline than the metro average, indicating a cooling in the core urban/suburban corridor.
• Montgomery County: 2,267 permits | 14% decrease vs. Q1 2025 – Still a high‑volume county, though trending downward.
• Fort Bend County: 1,591 permits | 11% increase vs. Q1 2025 – A standout performer in the Houston region, bucking the downward trend.

Dallas Area Counties

• Tarrant County: 1,947 permits | 18% increase vs. Q1 2025 – A significant growth area, especially notable following a remarkable 66% year‑over‑year increase in 2025.
• Collin County: 1,586 permits | 39% decrease vs. Q1 2025 – A substantial contraction, suggesting a cooling period after years of elevated activity.

Austin Area Counties

• Travis County: 1,050 permits | 115% increase vs. Q1 2025 – The most dramatic growth rate in the state, signaling a powerful resurgence in central Austin’s residential development pipeline.
• Williamson County: 774 permits | 6% decrease vs. Q1 2025 – A modest decline, but still a major contributor to Austin’s overall expansion.

San Antonio Area Counties

• Bexar County: 1,075 permits | 13% decrease vs. Q1 2025 – Consistent with the metro’s overall moderate contraction.

High‑Value Residential Construction: Homes Over $500,000

The luxury and upper‑tier market segment remains active across several key counties. Through Q1 2026, 1,900 new residential construction permits valued above $500,000 were recorded across the four major metros.

Counties with the highest concentrations include:

• Tarrant County (Dallas area): 338 high‑value permits
• Collin County (Dallas area): 343 high‑value permits
• Harris County (Houston area): 318 high‑value permits

The distribution underscores the continued strength of affluent buyer segments in the Dallas–Fort Worth and Houston regions, even as broader market activity moderates.

So, what does the latest report for Q1 2026 tell us? It paints an early picture of a Texas housing market that is cooling but not shrinking in a destabilizing way. So far, a few key themes have become apparent… First, seasonality and early‑year caution often suppress Q1 permit totals. Additionally, regional divergence is becoming evident, with Austin accelerating while Dallas recalibrates. And finally, high‑value construction remains resilient, suggesting confidence among upper‑income buyers and developers. As the year progresses, permit activity will likely respond to interest‑rate movements, labor availability, material costs, and ongoing population growth—factors that have historically shaped the construction cycles in the Lone Star State.

To gain more information on the builders, homeowners and permits for the construction activity above, check out HBW for your copy of the latest construction data reports. To gain access to the HBW database and receive custom and detailed reports on the latest residential and commercial building activity in Fl