Metrostudy: ‘We didn’t see the drop off of home starts’ in Houston area during COVID-19

“We didn’t see the drop off of home starts that I thought we would see because of COVID-19,” he said.

Between January-March, there were a total of 8,403 home starts across the Greater Houston area, about a 21% increase compared to January-March of 2019, per Metrostudy data. And between April-June, there were 7,644 new home starts, which represents a 3% increase versus 2019 second-quarter data, Dean said.

Homebuilders experienced record sales in the month of May, he added. June sales also performed well.

However, whether home starts and new home sales will continue this performance throughout 2020 depends on five factors, he said.

• Interest rates: Interest rates are low and are unlikely to increase in the near future because of the economy, Dean said. This will help homebuying activity.
• Job losses: The vast majority of job losses in the Greater Houston area—similar to the nation—have occurred mostly in the restaurant industry, retail and health care, Dean said. Of those, more employees in the health care industry make enough income to purchase a new home, so the overall number of people who can buy a new home has not declined too much so far.
• Oil prices: If the price of oil does not increase, Houston-area energy companies may issue additional layoffs, and fewer individuals and families would be able to afford new homes, he said. This decreased consumer demand would slow sales and home starts.
• Supply condition: Homebuilders paused on buying new properties for several weeks in March and April, Dean said. So at the end of 2020, the Greater Houston area may not have enough properties to build on for demand, and a slowdown would occur.
• Coronavirus pandemic: The ambiguity around the virus and its spread is a factor that negatively affects homebuilding and buying, he said. “We truly don’t know what’s happening with COVID-19,” Dean said.