Missing: Almost 170,000 D-FW new homes

North Texas builders can’t keep up with buyer demand and have struggled to ramp up production in the years since the last housing bust.

D-FW builders started almost 20% fewer homes in the last 10 years compared with the previous decade.(Lola Gomez / Staff Photographer)

Labor shortages, rising construction costs and supply chain issues have made it harder for Dallas-Fort Worth homebuilders to keep up with record buyer demand.

As a result, the D-FW area is short 167,093 homes built between 2008 and 2020, the largest of any U.S. metro area, according to a new report by Zillow.

Nationwide, there’s a shortage of 1.35 million homes built since 2020, analysts say.

“Builders in recent months have put the pedal to the metal to get new homes up and meet a rush of demand, and we just saw the first full year of above-average construction since the mid-2000s housing crash,” Zillow senior economist Jeff Tucker said in the new report. “This isn’t a new boom cycle of new construction so much as it’s an attempt to get even from the last bust.

“There is still a long way to go to catch up from more than a decade of slow construction, and some markets have longer to go than others.”

Many U.S. homebuilders shut down during the Great Recession. And builders have struggled to ramp up production in the years since the last housing bust.

During the last 10 years, North Texas builders have started about 290,000 houses, almost 20% fewer than in the previous decade.

At the same time, population in the area and demand for housing has boomed, creating a chronic shortage.

“The implications of this shortfall are being felt now as home prices rise in Dallas and across the country,” Zillow spokesman Mark Stayton said. “A limited supply of homes as demand has surged is a main driver of rapid home price growth during the pandemic.”

Along with the D-FW area, the biggest building shortfalls have been in Miami (142,650), Phoenix (122,288) and Seattle (113,292), according to Zillow.

North Texas homebuilders have been scrambling to catch up.

The number of homes under construction in the area has jumped by almost 77% in the least year, according to Dallas’ Residential Strategies.

And D-FW builders have started a record almost 59,000 houses this year.

But with huge backlogs of sales and buyers on waiting lists, it’s unlikely that area new home construction will meet the unprecedented demand.

Ted Wilson, principal with Dallas-based housing analyst Residential Strategies, said demand for housing in North Texas has increased significantly because of the growing economy here, large numbers of young renters entering prime home buying ages and low mortgage rates.

“In the 10 years leading up to the COVID pandemic, D-FW saw the net creation of about 1 million jobs,” Wilson said. “During this period, due to housing affordability challenges, there were many would-be purchasers of homes that became renters instead.

“This trend signaled to us that there was a building of pent-up demand for for-sale housing,” he said. ” The dramatic decline in the 30-year mortgage rate during the COVID outbreak has unlocked much of this demand as renters can now afford to purchase new homes.”

Wilson said many aging millennials are ready to buy houses.

“As long as D-FW housing remains affordable — meaning that interest rates stay low and housing inflation moderates — we anticipate that there will continue to be strong demand for for-sale housing.”

In August, September and October, D-FW builders actually took out fewer permits each month to start new houses than a year earlier because of construction capacity constraints.

There’s currently less than a two-month supply of preowned homes for sale in North Texas, and at the end of the third quarter, there was less than a 1-month inventory of new homes available.

Along with the D-FW area, all of Texas’ major metros are short on new homes. San Antonio is missing 83,824 new houses.

In Austin, builders have underproduced by 64,354 houses, and Austin is missing 51,065 new homes.

Information provided by the Dallas News

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

stevebrown@dallasnews.com @SteveBrownDMN

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