Dallas-Fort Worth new home construction last year reached its highest level in six years, causing supply constraints that will spill over into this year, according to a Metrostudy market report Monday.
Builders ended 2013 with 2,622 finished homes in inventory, a 1.6-month supply, down 8 percent from 2,862 homes, or a 2.1-month supply, at the end of 2012, the housing report said.
Moreover, the inventory of available lots to build stood at 46,029, or enough supply for 26.1 months, at the end of December. At the end of 2012, the number of lots was at 51,658, or a 34.8-months supply, the report said.
“The market will not have the ability to grow at the same rate in 2014 as it did in 2013 because of the supply constraints,” said David Brown, Metrostudy’s regional director in Dallas-Fort Worth. “With the increased construction activity in 2013, the months of supply of lot inventory in many submarkets, such as Frisco and McKinney, has dropped more than 30 percent during the last year, driving up lot prices significantly over the last year in these high demand locations.”
In 2013, new home builders started construction on 21,197 homes, up 19 percent from 17,799 starts in 2012, the report said. Builders also closed the sale of 19,945 homes in 2013, up nearly 23 percent from 16,250 home closings in 2012.
Despite strong demand because of job growth, higher home prices and rising interest rates will likely have some impact on market growth this year, Brown said.