Despite a pandemic that has staggered the U.S. economy, new home construction in the Tulsa area has reached its highest point since the housing boom preceding the Great Recession.
Through the first four months of 2020, more than 1,100 new homes were started in the Tulsa area, according to data from the Home Builders Association of Greater Tulsa. It’s the most in the first four months of a year since 2007, when there were approximately 1,500.
“When the (pandemic) started, you get a little nervous because you don’t know exactly what’s going to happen,” said Jeff Starkweather, vice president of the Home Builders Association. “When I saw the April report, I was really pleased with the overall growth.”
In April, there were 314 new home starts in the Tulsa metro area, an increase of 23.6% from 2019. It’s the highest April total since before 2010, and it’s 14% more than any April in the last decade, according to data from the Home Builders Association.
The totals are in stark contrast to the 30.2% April decline reported nationally by the U.S. Commerce Department.
There were 1,146 new home starts in the Tulsa metropolitan area through the first four months of the year. That’s nearly 5% higher than the first four months in any of the last 10 years.
For Broken Arrow-based Shaw Homes, March was a record month for sales for the 35-year-old company. And then, …
“In April, we shattered the record,” said Aaron Antis, Shaw Homes’ director of sales and marketing.
Antis said 2019 was a record-setting sales year for Shaw, and he said 2020 could double that. Last year, Shaw sold 66 homes through April. This year, that four-month total was 148.
Starkweather is the co-owner of Epic Homes, a custom home builder. He said the company was on a record pace in January and February. That slowed in April, but the number of presentations to potential customers remained strong, Starkweather said.
“When those start, and with the number of inquiries we see, we could have a very good year,” Starkweather said of Epic’s potential for the rest of 2020.
The increase in new home sales across the Tulsa metro area can be attributed to a few factors, Antis said.
First, interest rates have plummeted. As the U.S. economy began to reel from the effects of COVID-19, the U.S. Federal Reserve made headlines as it lowered rates to historic lows. While mortgage rates aren’t directly tied to the Fed’s moves, they often move in the same direction — and that direction has been down.
As Antis noted, some mortgage rates dipped to “ridiculous” levels, below 3%.
“People have been hearing about low rates so long, a lot of people have become kind of numb to that language in the news and in advertising,” Antis said.
“Then, when they said the Fed cut the rate to zero, people started paying attention again and realized what they could buy for the money. …
“I’ve never seen the rates people are getting right now.”
Lower interest rates mean some people can buy a larger home — or a new one — for the same monthly mortgage they paid previously. Antis said Shaw Homes has customers who are selling their existing homes to buy new ones for lower monthly payments.
In addition to low rates, Antis said, real-estate agents have told him the coronavirus is affecting the market for existing homes. People selling homes are “afraid to have someone come in their house and look,” he said.
But potential buyers have been willing to keep looking.
“We are way busier than we’ve ever been,” Antis said. “People aren’t afraid to come into our model homes.”
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