Southwest Austin - Dripping Springs Edition | July 2025

Real estate

BY BEN THOMPSON

Austin-area housing production slows

A closer look

Whitaker also pointed to some caution on the buyers’ side after years of median price increases and high interest rates. Whitaker and Hughes both noted that buyers may be able to get some financial help when buy- ing new builds through larger developers, which are offering deals like interest rate buydowns to make purchases more affordable in an uncertain time—for now. “We might be in that scenario for a while longer, but the second the market shifts, we were behind on homes already and there’ll be a lot more buy- ers, and you’re going to see some prices go up and things get harder to come by again,” Hughes said.

on starts, but they’re doing it in a much more thoughtful and healthy way.” Taylor Jackson, CEO of the Home Builders Association of Greater Austin, said builders are facing challenges like limited natural resources, land and infrastructure needed to support more new homes. Another factor influencing the pace of new construction, she said, is the rising costs of local regulations and development fees. “As far as housing starts right now, we are seeing quite a bit of increases in impact fees by cities,” Jackson said. “That will definitely also slow development.” April Whitaker, Austin division president with homebuilder Taylor Morrison, said developers are responding to a peak in housing supply for the region. “You’re probably seeing a slight contraction in starts just to help offset what’s already an oversupply in the market right now,” she said. “We’ve pulled back slightly where it makes sense. We want to be good stewards of the market and not put too much to market.”

Central Texas has seen several years of declining housing production after experiencing a residential building boom from the 2010s through the peak of the COVID-19 pandemic. The number of new housing permitted across the Austin-Round Rock-San Marcos metro peaked in 2021 with more than 50,000 units added, according to U.S. Census Bureau data. Since then, the region has seen annual declines in new construction, including both single- family homes and apartment complexes. Building activity hasn’t completely halted, though, with tens of thousands of units still coming online across Central Texas so far this decade. Keith Hughes, vice president of sales with the real estate research firm Zonda, said builders learned during the Great Recession of the 2000s that new development shouldn’t ever grind to a stop even if market conditions change. “They were building like mad and trying to find locations, and there was a run-up on land and homes and home prices and all the things that came with that [through the early 2020s],” he said. “So builders have cut back

One more thing

The Austin area is seeing a greater drop- off in new home additions than elsewhere in Texas. From 2023 to 2024, the Austin metro saw a slight decrease in the number of single-family permits. On the other hand, the Dallas-Fort Worth, Houston and San Antonio regions all saw growth—with the latter tracking the highest gains. “It really does come down to economic development,” Jackson said. “San Antonio is doing a great job of recruiting new companies, and part of that is because San Antonio’s more affordable to live in and more affordable to build in.”

Central Texas development downturn Since peaking in the early 2020s, the Austin metro is seeing fewer new housing permits each year.

Total

1 unit

2-4 units

5+ units

60K

50,907

50K

Measuring metros The Austin region recently saw a greater drop-off in new single-family home permits than Texas’ other most populous areas.

42,362

42,264

38,773

40K

32,294

32,037

30,035

Houston metro San Antonio metro

Austin metro Dallas metro

30K

26.16%

20K

30%

11,620

20%

10K

10%

-0.59%

0

0%

2018 2019 2020 2021

2022

2023

2024 2025*

Single-family home permits

*THROUGH MAY SOURCE: U.S. CENSUS BUREAU/COMMUNITY IMPACT

SOURCE: U.S. CENSUS BUREAU/COMMUNITY IMPACT

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SOUTHWEST AUSTIN - DRIPPING SPRINGS EDITION

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