DFW Homebuilding Starts Increased 50% in Fourth Quarter

High mortgage rates and construction costs didn’t stop North Texas home builders from ending 2023 with a bang.

Dallas-Fort Worth builders escalated new home starts by 50 percent year-over-year in the fourth quarter, beginning construction on 12,173 single-family homes compared to 8,107 homes in the fourth quarter of 2022, the Dallas Morning News reported, citing Residential Strategies.

With the late-year surge, there were more than 50,000 new home starts in 2023, marking a 3 percent year-over-year increase. It was the second-most productive year on record in DFW, even with higher mortgage rates. Now that rates are starting to dip, home builders are expected to stay busy in 2024, especially as North Texas continues to see rapid growth.

“It was a really good year for the builders,” Residential Strategies’ principal Ted Wilson told the outlet. “The drop in the 30-year mortgage rate has renewed enthusiasm among our builder clients about the prospect for a solid spring housing market in 2024.”

DFW builders also sold a record-setting 52,600 houses in 2023, a 4 percent jump from 2022. Areas north of Dallas and Fort Worth, in particular, attracted a slew of relocation buyers with substantial incomes and down payments, thereby mitigating the adverse impacts of rising interest rates.

High interest rates have also contributed to the boom in homebuilding. Inventory of resale homes has dwindled due to homeowners’ reluctance to abandon lower mortgage rates.

Rates peaked above 8 percent in October before moderating to approximately 7 percent, the outlet reported. Still, rates remain considerably higher than previous years, when they hovered between 3 and 4 percent.

By the end of last month, 8,282 finished new homes were available in North Texas, equating to a two-month supply. As the market anticipates further moderation in home financing costs, builders remain optimistic about a prolonged sales surge in 2024 amid evolving homeowner preferences and market conditions.

—Quinn Donoghue