A company is issuing more than $69 million in bonds to help finance nearly 2,000 homes in a development east of Houston, one of the fastest-growing metropolitan areas in the country.
The National Finance Authority said the 1,930 residential lots are part of a larger master-planned project called River Ranch in Liberty County between Dayton and Mont Belvieu, Texas.
The first residents have moved into River Ranch. The 2,500-acre development is due to have more than 6,600 homes, along with shops, restaurants and apartments. Buildout is expected by 2035 or sooner, said Eddie Gray, managing partner of River Ranch for master developer RR Funding.
The Houston region ranks as the nation's fifth-largest metropolitan area, with a population of 7.5 million people, according to the latest U.S. Census Bureau figures.
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What's more, the Houston region added nearly 140,000 residents between mid-2022 and mid-2023, the second-largest population increase in the U.S. Dallas, the nation's fourth-largest metropolitan area, led the nation with nearly 152,600 new residents, according to the Census Bureau.
During the first 10 months of 2024, Houston issued the most single-family building permits of any metropolitan area in the nation, according to the National Association of Home Builders.
PulteGroup among builders
RR Funding is a joint venture of about 15 homebuilders, including the nation's largest by homes sold, D.R. Horton, of Arlington, Texas. Other builders include Atlanta-based PulteGroup and K. Hovnanian.
Home prices at River Ranch will range from the $300,000s to more than $430,000, with some priced in the $500,000s, according to Gray.
The project has excellent drainage and is located north of a hurricane evacuation zone, he said in an interview.
"It's nice to be able to live in a place where you don't have to evacuate when a hurricane's coming," Gray said.
Zonda, a consulting firm hired by the master developer to conduct a market study, indicated the project has a good chance for success. The study cited strong long-term growth projections for the Houston metropolitan area, a location with access to employment and proven demand for homes.
However, Zonda also noted potential risks, including persistently high mortgage rates and home affordability at a record low after strong price gains in 2021 and 2022.
"That could limit potential price growth and/or increase vulnerability to home price declines," the study stated. "With that said, new home prices and sales have been steady over the past six to nine months as builders have aggressively bought down mortgage rates as an incentive to buyers."