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\u201cHouston is underbuilding compared to recent population trends,\u201d Dietz said at the\u00a0Greater Houston Builders Association<\/a>\u2019s midyear economic forecast on Tuesday.<\/p>\n The greater Houston area added 16 people per 1,000 residents but issued only 5.86 single-family homebuilding permits per 1,000 residents in 2025. As building material costs<\/a> continue rising, the region saw a 10% year-over-year drop in single-family building<\/a> permits in April, Dietz\u2019s presentation showed.\u00a0<\/p>\n \u201cThe demand for single-family construction has decreased,\u201d Dietz said. \u201cThe number of single-family homes is down 15% to 20% from two years ago.\u201d\u00a0<\/p>\n Average building material costs are up 8% from a year ago, a direct effect of the lingering impact of tariffs<\/a>, Dietz said. Cost increases range depending on the specific material. Aluminum pricing is up 60% year-over-year, while lumber prices are basically flat, he said.<\/p>\n Regulatory costs are also hindering homebuilding. Regulatory costs to build a new home increased by 40% from 2021 to 2026, averaging about $132K per new home, per the presentation.<\/p>\n That means regulatory costs account for 26.4% of the price of a new home. Builders can expect to pay about $47K in regulatory costs during development, for items like fees and required studies, and the remaining $85K during construction.<\/p>\n The price of homes in Houston has increased 43% since the onset of the pandemic, which Dietz called \u201ca healthier place to be\u201d compared to other fast-growing markets\u00a0in Florida, where 60% to 80% increases have been recorded.\u00a0<\/p>\n The overall home price in the U.S. has increased 59% since Covid. In Texas, the increase is 51%.\u00a0<\/p>\n Housing affordability<\/a> remains a significant issue in Houston and the rest of the country. The home price-to-household-income ratio is 4.84 nationally, down from a high of 5.34 in the second quarter of 2022.\u00a0<\/p>\n Ideally, that ratio would get closer to 4, Dietz said, and legislators and regulators will ease burdens to development. The removal of the 21st Century Road to Housing Act<\/a> provision requiring build-to-rent developers to sell properties to a single-family buyer within seven years is an example of easing burdensome restrictions, he said.<\/p>\n \u201cA policy win for the industry, recognizing a housing supply bill should supply housing, and got that really harmful provision out,\u201d Dietz said.<\/p>\n