With affordability challenges hampering the U.S. new home market, sales have started at a Houston-area development that targets first-time buyers.
Cyrene Homes, Smith Douglas Homes and Tricoast Homes have opened model homes at La Segarra in Brookshire, Texas, according to master developer Bold Fox Development. Home prices at the development roughly 30 miles west of downtown Houston range from the $230,000s to the $260,000s.
The homes' sizes vary from about 1,375 to 2,400 square feet.
“With homes priced well below $300,000, La Segarra is where people who have only dreamed of owning a home can achieve their goal," said Alex Kamkar, managing shareholder of Bold Fox, in a statement. "Current builder incentives that lower interest rates and help with closing costs make the dream of homeownership even more attainable.”
Record home prices, mortgage rates near 7% and rapidly rising property insurance costs in some coastal areas have shut out many young professionals from homeownership. The share of first-time homebuyers has reached an all-time low of 24%, according to the most recent figures from the National Association of Realtors.
Meanwhile, U.S. homebuilders are reducing prices and offering incentives such as mortgage-rate buydowns to boost demand. They say many buyers are reluctant to commit, citing affordability woes.
The National Association of Home Builders/Wells Fargo Housing Market Index found 37% of builders cut prices last month, the highest reading since the trade association began tracking the data in 2022. Smaller companies don't have as much leeway to cut prices and are struggling to compete, according to analysts.
The 215-acre La Segarra is along Gassner Road and FM 362, a few miles from Interstate 10. It's named for the La Segarra region northwest of Barcelona, Spain, and features ancient color tones, stone blocks and other materials, according to Bold Fox.
The development's amenities include four lakes, community trails, a central plaza and a 1.8-acre lakeside recreation area. The first phase contains 117 homes, and plans call for 658 to be built in total.
The Houston metropolitan area is the nation's second-fastest-growing, with more than 198,000 new residents between 2023 and 2024, according to the U.S. Census. Only New York-Newark-Jersey City added more, about 213,000.