S
an Antonio is solidifying its position as the epicenter of housing growth in Texas, driven by a residential construction boom. The city's annual home starts reached 17,751 in the third quarter, surpassing Austin's 16,663 starts and marking a 33% year-over-year increase compared to Austin's 11%. According to Zonda vice president Keith Hughes, San Antonio's robust growth is attributed to its affordability, with homes priced at $312,000 on average, significantly lower than Austin's median of $425,000.

    Lennar, a Florida-based homebuilder, leads the charge in San Antonio, accounting for 61% of single-family permits pulled across the city in the third quarter. Johnson Development Services is also contributing to the city's homebuilding activity with its 800-acre residential community featuring 2,000 homes on the Far West Side.

    Affordability remains a key driver attracting buyers to San Antonio, particularly as mortgage rates rise into the 7% range. Builders are responding by offering incentives such as mortgage-rate buydowns to keep homes within reach for buyers. "If they're doing buydowns, they will continue to do buydowns," Hughes said.

    San Antonio's homebuilding rate represents the second consecutive quarter of surpassing other Texas metros in growth, with Dallas and Houston reporting 11% and 14% year-over-year increases, respectively. Other Sun Belt cities like Phoenix and Miami also saw substantial increases of 50% and 44%, respectively.