Bad weather in the fourth quarter of 2013 pushed new home construction into early this year, boosting home-building activity by 27 percent in the first quarter, according to a market study released Wednesday.
Metrostudy, a provider of housing market information, said builders started 5,562 homes in January, February and March, compared with 4,363 during the same period a year ago. On an annual basis, 22,365 homes were started over the last four quarters, compared with 18,975 the previous year.
The report follows a similarly bullish account from Residential Strategies, which tracks a broader area and showed starts up 59 percent in the quarter. The first-quarter climb in home building was much higher than expected.
“We are only expecting a 10 percent to 15 percent increase in starts during 2014 based on the availability of lots and our clients’ plans for the year,” said David Brown, Metrostudy’s regional director in Dallas-Fort Worth. “Part of the large first-quarter increase was caused by weather and lot delivery delays during the fourth quarter of last year, pushing some starts into this year.”
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The number of closings also rose. In the first quarter, sales were closed on 4,736 new homes, up 14 percent from 4,160 in the first quarter of 2013, the report said.
Still, lots prepared for development remain in tight supply, and there is only a 1.7-month supply of finished new homes. The availability of lots will affect housing starts for the rest of the year, Brown said, likely driving up construction costs as well as home prices.
Only about 15,000 lots are under construction in the Metroplex as developers remain cautious about launching projects. About 3,000 of those were expected to be completed by the end of March.
“Supply constraints have been the headline story in the home-building business over the last year and a half and will likely remain the story in 2014,” Brown said. “Home buyers this spring are being greeted with fewer choices and much higher prices than a year ago.”