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Total construction in Dallas-Fort Worth is up 22% over last year through the first seven months of 2021, driven by home and apartment building.

More than $16.7 billion worth of construction projects launched from Jan. 1 through July 31 in DFW, according to a new report from Dodge Data & Analytics. Residential construction made up $10.6 billion of that, while nonresidential accounted for $6.1 billion.

For the year, residential construction, which includes single-family homes and apartments, is up 31% over the same period last year. Nonresidential construction is up 10% through the end of July compared to the same timeframe in 2020, according to Dodge. Nonresidential buildings include office, retail, hotels, warehouses, manufacturing, educational, health care, religious, government, recreational and other buildings.

Nationwide building starts fell 3% in July to a seasonally adjusted annual rate of $854.8 billion, the Dodge report says.

Construction material prices continue to climb, weighing heavily on building starts, said Richard Branch, chief economist for Dodge Data & Analytics.

Lumber and copper prices have fallen in recent weeks, but steel, plastic and other construction-related products are still rising. The increases will continue to tamp down construction starts over the coming months, partially offsetting the impact of stronger economic activity overall, Branch said in the report.

“A further risk to the sector is the rising number of COVID-19 cases due to the Delta variant,” Branch said. “While we don’t expect significant business restrictions in response, it is a risk that can not be fully discounted.”

“On the upside, projects entering the planning stage remain at levels not seen in several years, and forward progress on an infrastructure program and the federal budget provides hope that brighter days are ahead,” Branch added in the report.

A hot new home sales market and multifamily construction are spurring the residential sector in North Texas.

New homes were on the market in DFW for an average of just 53 days last month, down from 96 days in July 2020, according to the three-month moving average of the HomesUSA.com New Home Sales Index.

Meanwhile, apartment rents and occupancies are rising across North Texas, stoking multifamily construction.

Occupancy in DFW is 92.5%, according to an August rent report from ApartmentData.com. The rental rate has grown 10.9% in the past year, and 35,183 units have been absorbed.

Some 103 new apartment communities have opened in the past 12 months in DFW, adding 29,857 units. Another 64 communities are under construction, which will add 17,853 units upon their completion. In addition, 158 communities totaling 63,089 units are proposed in Dallas-Fort Worth, according to ApartmentData.com.

North Texas leads the state in new construction.

Construction in Houston totals $13.1 billion year-to-date, which is down 5% from last year, according to Dodge. A 34% plunge in nonresidential construction is to blame for the decline. Residential construction in Houston totals $13.1 billion through July, while nonresidential totals about $4.4 billion.

In Austin, construction totals $7.3 billion for the year, up 10% over the first seven months of last year. Almost $5.5 billion is residential and almost $1.9 billion is nonresidential.

San Antonio’s construction totals almost $4.6 billion so far this year.  More than $2.8 billion of that is residential and roughly $1.7 billion is commercial. Residential construction is up 27% year-to-date in the Alamo City, and nonresidential is down 20%.

Publication: Dallas Business Journal

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