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Builders continue to slow their roll in North Texas suburbs like Frisco, McKinney and Prosper

Permits for single-family home construction in January plunged 65% in McKinney, 64% in Frisco, and 63% in Prosper compared with January of 2022.
Credit: Jake Dean / Dallas Business Journal
A new home under construction in Denton County.

FRISCO, Texas — Workers are hammering away at plenty of new houses in progress in the suburbs north of Dallas and Fort Worth — but homebuilders have paused many projects not already in the works.

Permits for single-family home construction in January plunged 65% in McKinney, 64% in Frisco, and 63% in Prosper compared with January of 2022.

While one month doesn’t make for a trend, those losses come on the heels of building permit losses of double-digit percentages last year in many of the hot spots historically known for new construction in Dallas-Fort Worth.

For all of 2022, single-family building permits fell 27% in McKinney, 30% in Frisco, and 24% in Prosper in 2022 compared to 2021, according to data compiled by Addison-based Tomlin Investments, which tracks new home construction north of Dallas-Fort Worth. 

That means 1,326 homes received the necessary city approvals for construction in Frisco last year, compared to 1,881 in all of 2021. McKinney’s permits were down to 1,258 in 2022 vs. 1,720 in 2021. Prosper’s permits fell to 967 homes from 1,221.

This January, the slide continued in Princeton and Anna, too, which fell 74% and 84%, respectively, compared to January 2022. Princeton’s permits fell 41% in all of 2022, to 1,041 homes, and Anna’s permits fell 23% in 2022, totaling 867 homes.

Sharply higher mortgage rates in 2022 drove down demand for new homes, and homebuilders halted or cut back construction because of the lack of demand.

There were exceptions to the declines in North Texas in 2022, including Denton, Melissa and Little Elm.

In Denton, permits were up 28% to 1,227 homes in 2022 from 955 in 2021. Melissa rose 13% to 906 homes from 801 in 2021. Little Elm was slightly higher, with 1,295 new-home permits in 2022 compared to 1,292 in 2021.

This January, Denton’s permits were down 44% compared with the total for January 2022 (dropping from 209 to 117). Building permits in Melissa dropped 67% (from 89 in January 2022 to 29 in January 2023). Little Elm slipped in January as well, dropping 56% compared to January 2022 (from 82 in January 2022 to 36 in January 2023).

For all of 2022, builders across North Texas initiated construction on 48,756 homes — down 16.2% from 2021, according to Dallas-based housing analyst Residential Strategies Inc.

The declining building permits in 2022, which fell especially hard at the end of the year, will spell a slow start for this year and probably a slow construction year throughout, given the still-high mortgage rates, said Ted Wilson, principal with Residential Strategies, in the report his company produced.

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