Business

Houston New Home Starts Down, But Still Leading Nation

Houston is still the single-family home sales leader in the country. But the market is showing signs of a slowdown. Rising affordability issues threaten the local housing market.

Metrostudy says new home starts in the last quarter were down 14.7 percent, year-over-year. The growth in new home prices has rapidly exceeded growth in incomes.

Ralph Bivins with Realty News Report says that’s particularly affecting millennials.

“This is a big topic — how we build affordable housing for millennials,” says Bivins. “Financing has been difficult. You know, many millennials want to live in an urban area, a walkable area.”  

Inner Loop prices are traditionally higher than the suburbs. Bivins says the industry faces challenges in addressing affordability, and one solution has been to build smaller units.

“They’re beginning to build little condos and smaller apartments that they can deliver to these people at a more affordable rate,” he explains.  

Houston’s had labor problems, dating from the oil industry’s fracking boom.

“Those companies doing that drilling needed workers badly and they would pay people tremendous amounts to help them drill these wells and get this $100 a barrel oil,” Bivins says. “So the builders, they have had a hard time with labor. Labor’s a national issue.”

Bivins says even though things are looking tougher for the housing industry, Houston led the nation in housing starts in 2015.

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