January 16, 2018
North Texas homebuilders are coming off one of their best years in a decade. The Dallas-Fort Worth area was one of the top homebuilding markets in the country. And, the outlook for 2018 is just as positive. But the increasing construction costs, combined with the need for more affordable housing, could tighten profits.
Higher lumber prices were a concern in 2017, after the Trump administration imposed trade duties on Canadian wood products. Robert Dietz with the National Association of Home Builders said the duties increase the per-home building costs by $1,300.
Furthermore, median new home prices declined a fraction at the end of 2017, with builders focusing on lower-priced homes. Still, Residential Strategies Inc.’s Ted Wilson said the market is returning to where a builder can do well with 5%-6% margins. “We did 10%-12% margins a few years ago, but I don’t think we’ll go back to those times,” he told the Dallas Morning News.