FRISCO, Texas — This originally appeared in the Dallas Business Journal, a WFAA news partner.
Building permits for future construction of homes in the suburbs north of Dallas — including Frisco, McKinney, Prosper and more — are falling faster than the national rate as North Texas builders focus on finishing jobs already in progress but shelve new ones.
With January and February totals in the books, single-family building permits are down 43% in Frisco, 39% in McKinney, and 42% in Prosper compared to the first two months of last year, according to data compiled by Addison-based Tomlin Investments, which tracks new home construction north of Dallas-Fort Worth.
Permits for new home construction are down sharply in Anna, Denton, Little Elm and Melissa, too. Those cities have dropped 68%, 21%, 55% and 16%, respectively, in January and February of this year compared to the same two months in 2022.
Nationally, single-family home building permits, a measure of future home construction, are down 12.8% from a year ago through February based on data from the U.S. Census Bureau. Single-family building permits across the U.S. increased 7.6% in February compared to January to a seasonally adjusted annual rate of 777,000 homes.
In Frisco, 160 single-family building permits have been issued in January and February compared to 298 in the same period last year. McKinney has dropped to 145 house permits from 239 in the first two months of last year. Prosper has fallen to 101 permits from 174 in the same period.
Anna has dropped to 48 permits so far this year from 150 last year, and Denton has declined to 215 permits from 272. Little Elm has issued 100 permits this year compared to 223 in January and February of 2022, and Melissa has dipped to 103 permits this year from 123 last year.
Mortgage rates rose dramatically last year — more than doubling — and remain volatile for buyers. Rates climbed half a percentage point throughout February, but are now cooling as uncertainty in the banking sector and other factors raise hopes that the Federal Reserve will stop raising interest rates or at least raise them in smaller increments than previously anticipated.
The declines in North Texas in the first two months of this year follow building permit losses of double-digit percentages last year in many of the traditional hot spots for new construction in Dallas-Fort Worth. For the full-year 2022, single-family building permits fell 27% in McKinney, 30% in Frisco, and 24% in Prosper compared to full-year 2021. Princeton’s permits fell 41% in all of 2022, and Anna’s permits fell 23%.
Despite the overall decline in permits for new homes in North Texas, construction on homes already in progress and the development of residential communities and lots for houses continues to boom in the suburbs of DFW.
Plans for large, new master-planned residential communities continue to be announced or break ground across North Texas on a weekly basis. And the number of new home sales in DFW rose in January, with sales figures for February due to be reported in the week ahead.