D-FW homebuilders took fewer permits to build houses in October

Permits for new North Texas houses fell for the third month.

Permits for new D-FW homes fell by almost 14% in October. (Elias Valverde II/The Dallas Morning News)(Elias Valverde II / Staff Photographer)

Demand for new North Texas homes has never been stronger. But for the third month in a row, permits for Dallas-Fort Worth home construction have fallen.

D-FW homebuilders filed almost 14% fewer permits for new homes in October compared with a year earlier, according to data from the Texas Real Estate Research Center at Texas A&M University.

October’s decline in permits follows decreases in September and August.

The recent declines are a change from the huge year-over-year increase in single-family building permits earlier this year.

Local builders sold more than 45,500 homes on an annual basis in third-quarter of 2021, 13.7% more than in the previous 12 months, according to data from Dallas-based housing analyst Residential Strategies.

And single-family starts this year have been up by an even greater rate than sales, running 35% ahead of last year.

But everything from land costs to labor and supply chain issues have kept a lid on North Texas homebuilding.

“Builders continue to battle construction capacity issues,” Residential Strategies’ Ted Wilson said. “Construction cycle times — the time it takes to build a new home — have been grossly elongated. In the past, the average time it took to build a new home was about 130 to 140 days.

“In a recent survey of D-FW builders, it was revealed that cycle times have now grown to 219 days — up 47% from third-quarter 2020,” he said. “The number of units under construction has mushroomed in the past year, climbing 77% to almost 37,000 units.”

Most builders are operating at full tilt and have months of sales backlogs, so they aren’t rushing to file permits for houses they can’t immediately start.

“While builders still are experiencing strong purchase demand and have a desire to grow, the realities of construction capacity are curbing their approach to housing starts and permits,” Wilson said.

Even with the recent declines, total building permits for single-family homes in the D-FW area were up about 20% through the first 10 months of 2021, according to the Texas Real Estate Research Center.

Steve Brown, Real Estate Editor. Steve covers commercial and residential real estate in Dallas-Fort Worth.

stevebrown@dallasnews.com @SteveBrownDMN

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