An HBW review of new residential construction permits in Texas during the first quarter of 2019
In the first quarter of this year, new residential construction permits in Texas were down by 8% in comparison to the same time last year. Upon reviewing the four major metro areas in the Lone Star State (Dallas, Houston, Austin, San Antonio), it was evident that all areas have experienced a bit of a slower start in new home construction. From January through March of this year, there have been 16,572 housing starts added to the HBW database for Texas. Out of the metro areas reviewed, Houston held the highest concentration of housing starts (greater than 7,000), while the Austin area appeared to be the most stable market, having the least amount of year-over-year change (-1 percent) in new residential construction permits.
Here is a closer look (by region) at new home construction permit data added to the HBW database for Texas during Q1-2019:
The Houston area hasn’t experienced major changes in new residential construction in comparison to the first quarter of last year, and nearly half of all new permits in Texas originated from the area. Since the start of the year, Houston reflects a 3 percent year-over-year decrease (Q1-2018 vs. Q1-2019) in housing starts, resulting in more than 7,000 new permits on file with HBW for Q1-2019. Higher value construction also appears to only be slightly behind last year; with approximately 240 higher value (greater than $500k) housing starts on file in Q1, the difference in higher value construction permits is minor at this point in the year.
While the Houston area reflects a lag in housing starts overall, there are a couple of counties that are ahead of last year’s figures… In Montgomery County, housing starts are up by 11%, resulting in approximately 1,525 new permits on file with HBW, and Galveston County has nearly doubled its total housing starts in comparison to Q1-2018.
Although Dallas ranks second for total housing starts (~5,350 permits) on file with HBW for Q1-2019, the area has experienced the greatest year-over-year decrease (-16%) in housing starts in comparison to other areas reviewed. Since 2015, Dallas has exhibited a marked year-over-year growth pattern in new residential construction permits, and while the slow start in new home construction appears to be significant, it is still too early in the year to know if the dip in permits is indicative of any real changes in the market. According to various reports, larger builders have pulled back on their starts due to a number of factors including housing affordability and the surge in mortgage rates during the fourth quarter of 2018. The total number of unsold homes has increased in recent months, and many builders will be focusing on moving unsold inventory in the coming months.
The Austin area appears to be the most stable of the metro areas reviewed so far this year. From January through March, there have been nearly 2,600 housing starts in the area, reflecting a mere 1% year-over-year decrease in new permits on file with HBW, and the higher value (construction value greater than $500k) market also appears to be steady and nearly on target with last year. Over the last several years, the Austin residential construction market has fluctuated with annual decreases as low as 3% and increases as high as 21%, but with reports of increased economic expansion and job growth, this year the area has potential for growth. Major tech companies have been fueling job growth in Austin; Apple recently announce its plans to build a campus in the area that will eventually employ 15,000 people, and housing prices in Austin continue to be below other leading tech hubs (Seattle, San Francisco, Denver), making it a desirable location for new and expanding tech businesses.
Since 2015, the San Antonio area has reflected annual growth patterns in new home construction, but in the first quarter of this year, housing starts are down by 7% in comparison to 2018, resulting in approximately 1,630 new residential construction permits added to the HBW database. New home construction has dropped in all counties with the exception of Bexar County where there has been an 11% increase in housing starts, resulting in 975 new residential construction permits in the first quarter of this year.
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 Florida, Georgia, Texas, Alabama, and Oklahoma, please contact HBW for details.