It’s an interesting time in the DFW housing market. The region’s population has surpassed an estimated 8 million. The pace of homes and apartment construction DFW has surged to unprecedented levels. Despite the significant development, some report shortage of housing units. Builders are working to make sure that is not the case.
A Surge in Housing Production
D-FW leads the nation in the production of single-family homes and apartments. Over the past decade, more than 367,000 new homes have been built. 181,000 apartments have also been constructed.The construction of 181,000 new apartments represents a 35% increase in the region’s existing stock.
D-FW is the largest housing market for single-family new construction. Nearly 43,000 new home closed in 2023, according to Zonda.
Addressing the DFW Housing Market
Despite these impressive numbers, the estimated shortage of homes for sale or rent in the Dallas metro area in 2022 was 48,150, according to a recent analysis by Zillow. Nationwide, the housing shortage grew to 4.5 million homes in 2022, up from 4.3 million homes, despite a pandemic construction boom. While 1.4 million homes were built in 2022—a record—the number of U.S. families increased by 1.8 million.
Between 2010 and 2022, the D-FW metro area added 661,000 homes and apartments.While the population grew by 1.54 million, builders continued to add homes quickly to the DFW area, helping address the shortage.
Developer Adjustments
To cope with higher prices and interest rates, developers have adjusted their strategies. They aim to deliver more affordable homes. Steve Langridge, owner of Taft Homes, mentioned that while development costs have leveled off or declined from their 2023 highs, they remain above pre-COVID levels. Langridge’s company now offers three different home types ranging from 1,600 to 1,800 square feet to adjust to higher costs.
Larger builders like D.R. Horton have also adopted this approach. They are building smaller homes. This is giving more families the chance to buy.
Interest Rates and Apartment Rents
Freddie Mac reported that the average 30-year fixed mortgage rate hit 6.73% for the week ending Aug. 1. This is the lowest since February. A 1% drop in interest rates could lower monthly mortgage payments by around $200.
On the apartment side, the massive supply continues to outpace demand. Apartment supply is expected to peak between the end of 2024 and the summer of 2025.This is according to RealPage projections. This will help keep rents in check. Fewer apartment projects are being started this year. Developers started 24,000 units for the year ending February 2024.
Conclusion
The D-FW housing market remains active. Developers and buyers continue to adjust to new markets. With continued growth and strategic adjustments by developers, the region is poised to address its housing needs while maintaining affordability and accessibility.
