THE HOME BUILDER October 2024 State of the Industry Summit held Sept. 25 Page Seven
hensive view of the housing market in the DFW region. One of the significant highlights is the stabilization of mort- gage rates. After a period of elevated rates, a decline of approximately 20% from their peak is observed, with fu - ture cuts expected to bring rates down to 5.9%-6.1% by the end of 2025. This trend is crucial for both buyers and builders, as it influences affordability and market activity. The report also highlights mixed impacts on business due to these changing rates. While 43% of respon- dents reported no impact, 29% saw increased consumer activity. Despite a slowing employment growth rate in Texas, the job market remains relatively stable with low initial unem - ployment claims, indicating a resilient economy. In terms of housing demand, new home starts and closings have normalized, capturing 29% of total closings in 2024. However, monthly new home contract sales have slowed since April. Notably, start activity is up year-over-year across most price seg - ments, particularly in the $300k-$399k and $500k-$749k ranges. On the supply side, project counts in the DFW metroplex are increasing, with 295 new projects opened versus 227 sold out in the past 12 months. Despite a balanced vacant developed lot supply, lot deliveries are slowing, yet they still outpace start activity. Zillow’s presentation by Scott
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industry in Texas.
in the Dallas-Fort Worth (DFW) area and beyond. These insights are crucial for industry professionals aiming to stay ahead in the competitive new construction market. The Association's annual event was held Sept. 25 at Venue Forty|50 in Addison. In addition to Hotchkiss, Summit partners were Copperweld and Corey Construction Residential and Commercial Roofing. Scott Norman, CEO of the Texas Association of Builders, provided an important overview of the political and legislative landscape during his presentation. He highlighted the im- plications of the upcoming elections and the state legislative session, which could bring significant changes to the housing market and construction
Norman noted that this year’s elections will see a large number of freshman representatives, which could lead to shifts in legislative priorities and policies. He emphasized how im- portant it will be to build relationships with them and educate them about the issues facing our industry. He also addressed recent building moratoriums that have been imple - mented in various parts of the state, posing challenges for new construc- tion projects. These moratoriums are often enacted to address infrastructure and service capacity concerns but can delay development and increase costs. Zonda’s 2Q24 DFW Market Up - date, presented by Bryan Glasshagel, senior vice president, offers a compre -
Gena Godinez Executive Officer
Rohrig, director of industry relations new construction, on Consumer In- sights and Buyer Behavior in New Construction offers a deep dive into the preferences and behaviors of today’s homebuyers. According to Zillow’s New Construction Consumer Housing Trends Report 2024, 42% of buyers are exclusively interested in new construction homes, a trend that has grown over the past three years. This preference underscores the importance of features unique to new construction, such as smart home technology and community amenities. Budget considerations remain paramount, with 89% of new con- struction buyers emphasizing the importance of staying within their initial budget. Financial incentives, like rate buydowns, are becoming critical in attracting buyers amidst high mortgage rates. Smart home capabilities are in- creasingly valued, with 63% of buyers considering them highly important, a 29-percentage point increase since 2019. Security features, thermostats, and other tech add significant value, making new homes more appealing compared to existing ones. Digital tools are no longer op- tional but essential. Features such as 3D tours, interactive floor plans and virtual staging help buyers visualize and understand homes better, increas- ing the likelihood of purchase. These tools have seen a significant rise in demand, with 72% of buyers wishing more listings offered 3D tours, up from 60% in 2020. All presentations emphasized the ongoing challenges in the housing market, including high-interest rates and affordability issues. However, they also highlight significant opportuni - ties. The preference for new construc- tion homes is rising, driven by unique features, digital conveniences and financial incentives that older homes can’t match. For builders and developers, the key takeaway is to stay attuned to con- sumer preferences. The DFW market presents a promising landscape for new construction..
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