Texas’ New-Home Market Still on Top

With another year almost in the books, we have enough data to project how Texas’ residential construction market performed in 2024. As of October, year-to-date single-family building permits climbed to 136,374—behind only 2021 and 2022, the peak years that followed COVID. This time last year, permits were at 126,031 because of rising mortgage rates at the time. Rates are slightly lower this year, and they’re expected to continue to fall.

Texas ranked first nationally in permit output—around 20,000 permits ahead of number two Florida and over 76,000 permits ahead of number three North Carolina. Texas remains relatively competitive in terms of home prices with an average permit value of $290,606, behind both California and Florida, both of which had values in the $310s range.

Even though Texas remains competitive, it has been losing its edge in the new home market. In 2020, Texas’ average permit value was $221,176, which was at the bottom of the top five list. Since 2021, permit value growth has been between 6 to 7 percent per year. This year, it was at $290,606, pushing Texas ahead of North Carolina, which was at $286,917. Still, Texas currently ranks 18^th for the most affordable permitted units.

Houston and DFW topped the list of metros by permit count both statewide and nationally. So far, Houston has authorized approximately 45,000 permits and DFW 40,500. In the Houston metro, around 38 percent of permits came out of Harris County with an average value of $371,000. Montgomery and Fort Bend Counties each accounted for around 22 percent of permits, and both had average values of around $285,000.

In DFW, Fort Worth authorized over 5,400 permits with an average value of $256, 265, making it one of the more affordable markets sitting below the state average. Collin County accounted for nearly 33 percent of the metro’s permits with Celina, McKinney, Princeton, Melissa, Frisco, Lavon, and Anna each authorizing over 1,000 permits.

Most other Texas metros bounced back from last year, when many were in negative territory year over year. This October, only 9 out of the state’s 26 MSAs were in the negative, signifying how strong Texas’ new home market is overall, not just in the major metros.

In fact, the fastest-growing market year over year for the second year in a row is Midland. Two years ago, Midland approved only 507 permits by October, well below the 813 average. It followed with 644 permits in 2023 and 1,172 permits so far in 2024. On the other end of the spectrum, Waco has now fallen two years in a row after demonstrating major growth in 2022.