Texas Housing Starts Rose to Record Heights in Late 2003

Fort Worth Star-Telegram, Texas

Andrea Jares

January 14, 2004

Jan. 14--Home construction kicked into high gear in the last part of 2003, resulting in another record year for sales and starts of new homes.

The number of new homes sold in the fourth quarter was the highest-ever for the final three months of the year. The last two months of 2003 were especially strong, a contrast to the weakness seen in October.

"We really knocked it out of the park in November and December," said Ted Wilson, partner at Dallas-based housing analysts Residential Strategies.

Another residential housing analyst, Metrostudy, said the number of housing starts in the fourth quarter was 19 percent higher than the year before.

Housing starts in the Metroplex were up 4.9 percent in 2003 compared with 2002, and closings were up 3 percent from the year before, according to Residential Strategies. Metrostudy's numbers show that annual housing starts in North Texas soared past 40,000 for the first time in 2003.

The strong growth in the fourth quarter may reflect the public's increased belief that the economy is getting better, real estate market watchers said.

"We're seeing a little bit more confidence," said Waco-based economist Ray Perryman.

"That tells me 2004 is going to be better," said David Christian, Fort Worth division president of KB Home. The home builder has increased its presence in North Texas to 33 communities in 2003 from 19 the year before.

That increased consumer confidence, paired with some volatility in interest rates in July, meant some prospective home buyers got serious about making a purchase, developers said.

Buying a home was also more affordable because interest rates remained relatively low throughout the year.

Despite the strong showing last year, and some builders' expectations of another solid year, the supply of new homes has started to inch upward in North Texas, said David Brown, director of the Dallas-Fort Worth region for Metrostudy. If it continues to grow, he said, it could rein in housing starts.

Still, the coming year is expected to have continued strong housing growth.

"It's been a very healthy market," Perryman said. "We might see starts drop off a little bit next year, but not anything major -- just because we have seen such a substantial growth this year."

Fierce competition will also continue among home builders, Wilson said, as they each try to expand their market share.

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(c) 2004, Fort Worth Star-Telegram, Texas. Distributed by Knight Ridder/Tribune Business News