During the second quarter of 2016, new home starts in Dallas increased, but not where its most needed, according a report from Metrostudy, a provider of primary and secondary market information to the housing and related industries.
This quarter’s starts increased only 2.5% when comparing the second quarter of 2015 to the second quarter of 2016.
Metrostudy credits the rainy weather in Dallas to the slower start numbers. Of the 91 days in the second quarter, the National Weather Service reports that 32 days had notable rain, the report said. Although the weather shouldn’t impact new home and lot delivery in DFW as severely as 2015, it will hamper lot and home deliveries this year.
Quarterly, starts remained flat, increasing only 1.8% from the first quarter, according to the report. Starts and closings are expected to remain steady for the remainder of 2016.
Metrostudy forecasts between 30,000 and 31,000 annual starts and 26,500 annual closings in Dallas-Fort Worth for 2016.
The greatest change, however, was in what types of homes are being built.
“The second quarter survey reflects a radical shift from lower new home prices, which now includes the segment from $200,000 to $249,999,” said Paige Shipp, Regional Director of Metrostudy’s Dallas-Ft Worth region.
“Over the past two years, starts below $200,000 decreased dramatically while starts between $200,000 and $249,000 remained relatively flat or slightly increased,” Shipp said. “This quarter, starts in that price tranche dropped 19.3%, which signals a possible extinction of new homes below $250,000 in DFW.”
“The surge in closings is most evident in the $250,000 to $299,999 and $500,000 to $749,999 price ranges where closings outpaced starts by 19.8% and 16.8%, respectively.”
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This shift to the more expensive home contributes to the increasing affordability problems.
In fact, in response to the second quarter’s GDP growth, the National Association of Realtors chief economist said that America is now experiencing an affordable housing crisis.