The number of new homes under construction was up in the first quarter compared to a year ago, the third straight quarter that new home builders have increased the number of homes they are building, the result of strong sales orders, Metrostudy said Wednesday.
"The increasing sales should lead to larger increases in starts over the next two quarters as backlogs are beginning to build for homebuilders," said David Brown, director of Metrostudy’s Dallas-Fort Worth office. Metrostudy tracks home-building activity in North Texas.
"The first three months of the year are reinforcing our forecast that 2012 will be the first year of recovery in the Dallas-Fort Worth housing market," he said.
Tarrant, Denton and Collin counties accounted for most of the increase in starts, Metrostudy said.
New home closings are also increasing from the second half of 2011, Brown said, and that is expected to continue as well.
Between January and March, 3,192 homes were started, compared to 2,975 homes in the first quarter of 2011. On an annual basis, which takes in the past four quarters, home starts in Dallas-Fort Worth totaled 14,277, down slightly from 14,524 annual starts totaled in the first quarter of 2011, figures show.
In the last three years, quarterly and annual home starts peaked in the second quarter of 2010, during the time the first-time homebuyers were offered a tax incentive.
Also in the first quarter, builders closed the sale of 3,327 homes, up from 3,179 closings in the first quarter of 2011.
Inventory declined significantly in the first quarter, to 7,370 homes built from 7,671 homes a year ago, and is now at its lowest point since 1993, Brown said.
Lot inventory also dropped, to 57,645 lots, or a 48-month supply, from 65,724 lots, a 54-month supply, a year ago.
With the improving new home market, prices could go up this year, particularly in stronger submarkets, Brown said.
"As lot supplies continue to shrink in the high demand submarkets, the cost of replacement lots is increasing," he said. "These higher costs will have to be passed on to the consumer resulting in increased new home prices during the second half of the year."
_ Sandra Baker