North Texas homebuilders ramped up for the spring and summer housing market with an increase in first quarter starts.
Builders started 8,765 homes in the first three months of 2018 — 6.5% more than in the same period last year, according to the latest housing data from Dallas-based Residential Strategies Inc.
New home sales were 4.3% higher than a year ago with 7,865 houses purchased.
Builders typically start more houses in the early months of the year to get ready for the seasonal buying rush.
"The builders said the spring market is pretty normal this year," said Residential Strategies principal Ted Wilson. "Things kicked off after the Super Bowl and they had a very strong March.
"Sales have been a little ahead of what they were doing last year," Wilson said. "The strength is really in the moderate price points."
Wilson said starts of Dallas-Fort Worth area houses priced from $200,000 to $250,000 rose by almost 20% compared with first quarter 2017.
"In recent quarters, builders have shifted much of their focus to the market areas and product types that can produce more affordable new homes," he said. "Builders are doing whatever they can to get prices down, but it's a challenge.
"Land prices are up and construction costs are up."
Even with builders trying to get new home costs down, the median price of houses they sold in the second quarter was $344,000 — almost $100,000 more than a midpriced preowned home sold in North Texas.
Wilson said sales and starts of more expensive houses are increasing at only a small rate.
"Those homes priced over $500,000 are extremely competitive right now," he said. "And with increased competition at the higher price points, we have noted many instances of incentives and discounting that make these offerings enticing."
"Housing prices in many upscale communities are finding buyer resistance these days"
At the end of the first quarter there were about 5,737 finished, vacant new houses available in the DFW area, according to Residential Strategies. That works out to just over a two-month supply of new homes in inventory.
During the last 12 months, North Texas builders have started 34,460 houses.
DFW new home production is now at the highest level since 2006. But home starts in the area are still almost 30% below where they were before the recession and national housing bust.
