Residential construction had a banner year back in 2021.

“We couldn’t build (homes) fast enough,” said Jason Wilkinson, owner of Prodigy Homes and president of the Home Builders Association of Tri-Cities.

But the next few years didn’t measure up to that high.

In 2023, Prodigy – known for higher-end custom construction – built 16 homes, or nine homes below its average of 25 a year. In 2022, it built 12 homes.

But in the last few months, conditions have started to pick back up, Wilkinson said.

He estimates that the company will be back up to 20 homes this year.

The Prodigy story is a microcosm for residential construction in the Tri-Cities area, which is starting to see increased activity after a slower 2023.

“There’s definitely been an increase (here),” said Jeff Losey, executive director of the Home Builders Association of Tri-Cities, at the end of August.

“Even at the beginning of the year, there were comments being made that there was a lot more activity in that first quarter than they had seen that entire year in 2023,” he said.

‘More normal’

Building permit statistics for the year so far bear that out.

As of August, about $308 million in single-family home building permits were issued in the greater Tri-Cities area, from Prosser to Connell. That compares to about $248 million for the same period in 2023 and about $312 million for the same period in 2022.

Pasco in particular has seen an increase, with $79 million in single-family home permits issued through August, compared to $51 million for the same period in 2023 and nearly $59 million in 2022. The 2024 year-to-date figure is the highest of any area city.

“Pasco traditionally has been about a third of all the permits pulled, however, since Covid, it hasn’t been quite the same. But they’re leading the charge again,” Losey said.

Part of the reason is subdivisions that are ready to build on at the right price points, he said. With construction on Road 100 and Broadmoor Boulevard, “they’re preparing for traffic because it’s clearly coming in Pasco. They have some of the subdivisions that are ready to go. As those subdivisions open up, that helps drive the permits,” he said.

Losey and Wilkinson both pointed to higher mortgage rates as a factor in the more sluggish home construction the last few years. A 30-year mortgage averaged around 7% for much of the back half of 2023, steadily climbing since around 2021, when rates spent much of the year in the 2%-3% range, according to mortgage buyer Freddie Mac.  

Rates have been falling recently and were at 6.2% on Sept. 12.

The uncertainty of a presidential election also can affect homebuyer habits, they said.

Still, Wilkinson said it’s not wise to wait to buy a home.

“It’s becoming more normal that we’re just going to have to deal with this 6% or above interest rate. That’s just the way it’s going to be,” he said.   

Home prices are rising, so “let’s say they wait for (the rate) to drop to 3%, but now the house is $60,000 to $70,000 more. Your payment is exactly the same, but you would be able to refinance if you bought now and it dropped,” Wilkinson said.

Optimism for 2025

Wilkinson said updates to the state’s residential energy code that went into effect earlier this year are one driver of rising home prices. “On your average home, it could be anywhere from $10,000 to $15,000 more just to make it energy efficient,” he said.

The update “has almost doubled what we have to do. We’ve got to put in a lot more insulation. The windows have to be different. We have to use certain HVAC equipment, certain hot water heaters, certain plumbing fixtures,” he said.

He also pointed toward the state’s move toward phasing out natural gas in homes and other buildings; Washington voters will decide in November 2024 on an initiative – sponsored by the Building Industry Association of Washington – to protect the option.

Still, he’s optimistic about 2025.

He’s also celebrating some recent good news.

One of Prodigy’s homes was a big winner at this year’s Parade of Homes, an annual event put on by the home builders association that showcases area builders.

The company’s 3,736-square-foot home on Trellis Court in Pasco racked up several awards, including best primary suite, best workmanship and best overall for the over 3,500-square-foot category. It’s already off the market, selling for nearly $1.4 million.

It has four bedrooms, including a master suite with a walk-in closet, freestanding tub, walk-in shower and heated floors. It also boasts a five-car garage and a theater room.

Wilkinson takes pride in the care and craftsmanship that goes into his homes.

“I’ve been building now for 27 years. And the thing I like the best about it is when (the home starts out) it’s just empty land,” he said. The subcontractors come together and “put together this giant 3D puzzle” that becomes a home.

You’re bringing “something to someone that they’re going to live in. They’re going to use it. They’re going to make memories in it. It’s going to stand the test of time,” Wilkinson said.

“I can come out here 50 years from now ... and maybe it’s not the same people living there, but it’s the same house that I built,” he said. “That’s the most satisfying part.”