The Commerce Department says, nationwide, builders broke ground on homes last month at a seasonally adjusted rate of
917,000. The only time the rate has been faster since June 2008 was this past December, when it topped 980,000.
But here in Houston, home inventory is stuck at its lowest level in thirteen years. Shad Bogany is chairman of the Texas Association of Realtors. He says local builders remain wary of stepping up construction, even though demand is soaring.
“They’re not building what we call standing inventory. They’re building still pretty much build-to-suit. If I’m a builder, what happens when I go out and build all these houses, then all of sudden their interest rates shocks royally up? Then I’m [left] sitting on inventory.”
Bogany notes that interest rates are climbing, though still well below the norm. He says local builders are raising their prices to reflect the higher rates, as well as the strong demand from Houston’s growing population.