Even with rising prices, Houston is seeing an substantial increase in new home construction. In fact, Houston area home construction permits have increased 35% since 2020. Despite labor shortages and supply chain issues, Houston area homebuilders are busier than ever. Laith Daik of Texas Loan Star says there are a few reasons for the uptick. "When lumber prices shot up so high, a lot of home builders put projects on hold. Subsequently, lumber prices have gone down and that has given the builders a chance to start new projects." Daik says price hikes don't matter to at least one group of buyers. "A lot of people moving into Texas from other states are able to buy a new house in Houston with a price point the could not have afforded to purchase in the state they came from." He says most of the new homes are priced between $300,000 and $500,000.
Lumber Prices are Falling - But Construction Costs Remain High
Despite a shortage of construction labor and supplies, Houston is seeing a lot of single-family home construction. Daik says many buyers are so happy with the low interest rates they'll wait. " We have seen a big uptick in hew construction starts. A lot of clients getting contracts that are to be built in the future." Dike says many of these are first time buyers who want all the latest amenities and are willing to pay for it.
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First Time Buyers in their New Home under ConstructionPhoto: Getty Images