In an era of economic worries and stiff interest rates, it could be a good time to build a new house.
…although a tough period for the contractors who actually do the work.
With demand for houses weak, greater numbers of home builders have been cutting their prices. According to the National Association of Home Builders, 30 percent of them have cut their prices this month. That’s the most since the Association started keeping track in 2022.
“There are some builders who have dropped prices,” said Aimee Bertrand, CEO of the Greater Houston Builders Association. “But, at the end of the day, they still have to cover the cost of building the home, developing the land and, with the pressure on pricing for materials, some of that gets more difficult in today’s climate.”
One painful part of the equation is tariffs, which now affect building materials. Bertrand said home builders “constantly” cringe over tariffs.
“Homebuilding has always based on pretty lean margins,” she said, “even when the market is doing really well.”
The NAHB reports that builder confidence is low, only 33 on the NAHB index. Any number lower than 50 is considered negative.
“We’re seeing pressure on prices,” Bertrand added, “not only as a result of costs going up for materials but also increased local regulation that’s putting the squeeze on what we’re able to offer in some communities.”
One area of opportunity for cost containment is the vast areas on Houston’s outskirts. She says families wanting to build homes are finding affordable land by moving farther, and farther, away from the center of the metropolitan area.
And they’re still coming.
“Houston is still positioned in a really great place, unlike some states,” she said. “People are still moving to Texas and they’re still moving to our area.”
Photo: Justin Sullivan