Homebuyers

Texas Tops the Charts: The Top 20 Cities for New Home Sales

October 16, 2024

Buyers looking for the best selection of newly built homes—and possibly even lower prices—might want to set their sights on Texas and other Southern states.

The Dallas metropolitan area was the nation’s hottest new-home market last year, according to a report from housing data and consultancy firm Zonda. It was based on the number of new-home closings in 2023.

Four of the top five metros where the largest number of new homes were sold were in Texas last year. Houston took the No. 2 spot, while Austin and San Antonio came in at No. 4 and No. 5 respectively.

Phoenix broke the Lone Star State’s lock, nabbing the No. 3 spot.

“The top markets for new-home construction make sense when you look at land availability and population growth,” said Ali Wolf, chief economist at Zonda. “A lot of the areas where there are higher levels of construction coincide with areas Americans have been moving to, especially following the pandemic.”

The areas with more new construction generally have more buildable land, have easier regulatory environments in which builders can receive construction permits, and have more demand from buyers. That’s why there is more new home construction in places like Texas and Florida, where there is often more land available and fewer restrictions.

“Land represents 20% to 50% of the value of most homes,” said Wolf. “So having a lower land price is helpful for having a lower home price.”

The addition of those new homes to the housing supply may also help keep prices from spiking. That’s because buyers have more to choose from instead of being forced to compete over a very limited supply of homes.

“Areas with higher levels of housing construction often offer better housing affordability,” said Wolf.

The median home list price in the Dallas metro was $434,667 as of Aug. 31, according to Zillow data. While that was higher than the national median of $403,267, homes in the Dallas area cost significantly less than in coastal cities like Los Angeles, at nearly $1.091 million, and New York City, at a median $709,300.

Although demand from purchasers is generally strong in the highly populated cities in the Midwest, West and Northeast, there often isn’t as much vacant land and there may be more building requirements than in the South.

This can push prices higher for new construction.

“A lot of the developable land near employment centers and in areas where people want to live has already been built on. In addition, there are geographic barriers, including water and mountains,” said Wolf. “Both factors make ramping up new-home production a challenging endeavor.”

With that in mind, here are the top 20 markets for new homes in 2023:

1. Dallas

2. Houston

3. Phoenix

4. Austin, Texas

5. San Antonio, Texas

6. Atlanta

7. Orlando, Fla.

8. Tampa, Fla.

9. Charlotte, N.C.

10. Raleigh, N.C.

11. Las Vegas