North Texas Home Builders Association

President’s Forward

NTHBA Members –

I did two things last month that tell you where our business actually is: sitting across from a buyer running the numbers on a payment, and sitting in front of the city trying to get dirt approved. Neither one sounds much like the national headlines.

If you read the news, you’d think we were all going under. Builder confidence has been under 40 for fifteen straight months, the longest run since 2012. Four in ten builders cut prices in July, and two in three are buying down rates or paying closing costs just to get somebody to the table. Then Texas REALTORS® put out second quarter numbers and the picture changed — all four big metros down, Abilene up 13.6%, Texarkana up 16.6%, statewide median flat.

So the “Texas housing market” isn’t one market. Austin and Dallas overbuilt entry-level product and are working through it. We never did. Our constraint isn’t empty houses — it’s lots, trades, and how long it takes to get through the process. Different problem, different solution.

One more item worth your time: the 21st Century ROAD to Housing Act became law July 11, the first real housing bill out of Washington since the 1990s. Starting in 2029, it ties federal block grant money to how cities handle zoning and land use. Anybody who’s spent an evening in front of P&Z over a plat knows what local process costs a project, and this is the first time in my career Washington has put real money behind that question. We have three years to help the city write that plan as a partner with data, rather than react to it later as a trade group with a complaint. I’d rather be at the table.

So while that is three years out, the item I’d watch closer to home … is how codes get interpreted, applied and adopted right here in our community. Code cycles have a way of moving forward on their own momentum, and there is a real difference between a change that makes a house safer and one that only makes it cost more. I worked through the second kind with different NTHBA leaders and City of Wichita Falls staff about seven years ago — the redesigns, the resubmittals, the carrying costs, the weeks spent debating what was and was not actually changing — and none of it made a single house safer. It just made them slower and more expensive.

And here’s why the timing of code changes matters — matters to me and matters to our community: our buyers are carrying about all the cost they can, and every dollar we add at the permit counter comes out of that same pocket. So from where I’m standing — this town sitting flat for as long as it has, and finally in a position to get off the ground — momentum like that is easier to lose than it was to build. Our current codes are safe and workable, and I’d like the cost and timeline of building here to stay predictable while we focus on growth.

If there’s something else you want covered in here, call or email me. I read every one of these before it goes out, and I’d rather write about what you’re dealing with than what the national news says we’re dealing with.

Have a good rest of the summer, and stay out of the heat where you can!!!

J. Tanner Wachsman

President, North Texas Home Builders Association

President, RJ Wachsman Homes

1. The 21st Century ROAD to Housing Act

• Became law July 11, 2026 after passing the Senate 85-5 and the House 358-32. The President neither signed nor vetoed it, so it took effect automatically at 12:01 a.m.
• First major federal housing bill since the 1990s, spanning dozens of provisions on housing supply, regulatory barriers, financing tools, and manufactured housing.
• Pressure on local zoning. Under the “Build Now” provision, cities and urban counties receiving CDBG entitlement money face funding conditions tied to zoning reform and local housing strategies. Those conditions don’t take effect until fiscal year 2029 and run through 2043 — a three-year runway for local governments to prepare.
• CDBG money can now build. Previously those funds went to infrastructure, rehab of existing housing, and public services. The new law makes construction of affordable housing eligible, capped at 20% of a recipient’s allocation. Congress funded CDBG at $3.3 billion for FY2026.
• Opportunity Zones. HUD may now give extra weight in competitive grant scoring to projects located in or primarily serving OZ-designated communities. The OZ program was permanently extended with new 10-year designation cycles beginning July 1, 2026.

Why it matters to us: This is the first time in a generation that Washington has put real money and real conditions behind local land-use reform. Wichita Falls is a CDBG entitlement city, which means the Build Now provisions eventually become our conversation and not somebody else’s. We have three years to be at the table when the city writes its housing strategy rather than reacting to it after the fact.

2. New Home Sales Snap a Two-Month Slide — Barely

• June new home sales came in at a 628,000 annual pace, up 1.6% from May’s revised 618,000 but down 5.6% from June 2025. Economists had forecast 610,000, so the number beat expectations.
• Median new home price fell to $398,300 — the lowest reading since July of last year, down 3.3% from May and 2.7% year over year.
• Inventory sits at 485,000 new homes for sale, representing 9.3 months of supply. That’s down slightly from May’s 9.4 months but still well above a balanced market.
• The South carried the month, jumping to 412,000 from 375,000 in May and posting both the largest increase and the highest volume of any region. The West went the other direction, dropping from 134,000 to 104,000.
• Spring selling season underperformed. Builders entered 2026 with cautious optimism, but the conflict in Iran pushed rates and oil higher. Consumer sentiment fell from 56.6 in February to 44.8 in May before recovering to 54.4 in July.

Why it matters to us: A 9.3-month national supply is the number to keep in your head when you decide whether to pour another spec slab this fall. But notice the regional split — the South is absorbing product while the West stalls. Our sub-market is nowhere near national inventory levels, and the median price falling to $398,300 is largely a shift toward smaller, cheaper product rather than a collapse in value. If you build to a price point our buyers can actually finance, the demand is still there. The buyer who disappeared is the one who needed a 5% rate to qualify.

3. Construction Costs Running Ahead of Forecast at Mid-Year

• Final-cost indices are running roughly 5% year over year, with further acceleration expected in the second half of 2026 — above earlier forecasts.
• Two cost channels are driving it. Trade policy exposure has widened beyond the original tariff list, and elevated global energy prices tied to the Iran conflict have raised embedded costs in energy-intensive materials.
• Tariff structure as of this spring: 50% on steel, aluminum, and copper items; 25% on derivatives; 15% on industrial and electrical equipment including transformers and panel boards; 10% on softwood lumber with derivative products at 25%.
• Labor is structural, not cyclical. Construction employment growth is tracking at 0.6% in 2026 against a historical average of 2.7%. ABC estimates the industry needs roughly 499,000 additional workers, and 61% of U.S. metro markets are currently supply-constrained — projected to hit 72% by 2027.
• Data centers are distorting the market. There is a widening gap between data center and non-data-center project costs, with the biggest jumps in markets carrying heavy data center activity.

Why it matters to us: Two takeaways. First, if you are still writing fixed-price contracts twelve months out with no escalation or allowance mechanism on electrical gear and metals, you are carrying risk you are not being paid for. Transformers and panel boards are the specific items to watch. Second, that data center note deserves a look from all of us given what has been discussed for this region. Large capital projects pull electricians and concrete crews out of residential work and bid them up, and that shows up in our subcontractor pricing long before it shows up in any published index.

Questions, corrections, or something you want us to cover next month? Call me directly at 940.782.0992