Homebuilding Permits

Single-family building permits continue to slide in the suburbs and exurbs north of Dallas and Fort Worth, although there are exceptions.  Year-to-date home-building permits are down 45% in Frisco, 27% in Celina and 21% in Prosper, with the spring building season well underway.  In Frisco, 624 single-family permits were issued in January, February, March and April combined. That compares to 1,134 in the same period of 2021, according to data compiled by Addison-based Tomlin Investments, which tracks new home construction around Dallas-Fort Worth.  So far this year, builders have pulled 732 permits in Celina and 378 permits in Prosper. That compares to 1,003 in Celina and 476 in Celina in the first four months of last year. Permits in Princeton plunged 48%, from 606 in the first four months of 2021 to 313 so far this year.  Home permits in McKinney, Melissa and Little Elm are down, too, albeit by smaller amounts. McKinney permits dropped 9% to 597 in the first four months, Melissa is down 4% to 295 permits, and Little Elm is down 5% to 451.

It's a different story in the exurbs Van Alstyne, Sherman, Anna and Denton.  Van Alstyne is up 146% year-to-date, with 251 permits so far. Sherman has soared 98% with 208 permits, Anna has escalated 29% with 516 permits, and Denton ticked up 9% to 381 permits to date.

• Dallas Business Journal, May 24, 2022

Building permits fell sharply in January in Celina, Frisco, Prosper and Little Elm — some of the hottest markets in North Texas and the nation for new home construction last year.  Celina, the top residential construction market in North Texas last year, dropped 51% in the number of homebuilding permits issued in January compared to the same month last year.  Frisco's building permits fell 48% year over year in January.   Prosper dropped 44% in homebuilding permits issued in January.  The January permit plunge was similar in Little Elm which fell 56%. Homebuilding permits also fell in McKinney, which posted a 22% year-over-year decline in January.

The downturn in some of North Texas' hottest homebuilding markets isn't a sign of diminished demand as much as it is a reflection of higher construction costs. The costs of construction nationwide are the highest seen in 50 years with contractors and homebuilders feeling the effects.    Homebuilding costs jumped by 17.5% year-over-year from 2020 to 2021, the largest spike in this data from year to year since 1970, recent data from the U.S. Census shows.  Homebuilders in North Texas last year were hit by an unprecedented swell of housing demand that prompted the industry to boost its production pace, said Ted Wilson, principal with Dallas-based housing analyst Residential Strategies Inc.  But a shortage of labor and materials has driven up costs and stretched out average building timelines, according to Residential Strategies' most recent quarterly market update.

• Dallas Business Journal, February 16, 2022