Building Boom: Single-Family Housing Permits Up 8 Percent in November
Despite the ongoing pandemic and the evaporation of many jobs, the housing market keeps cooking. Trade association Housing First Minnesota reports that builders pulled permits for 701 single-family homes across the Twin Cities in November, a solid 8 percent uptick compared to November 2019.
Year-to-date builders have pulled 5,758 single-family permits for the 11 months of year so far. That puts single-family home construction 1 percent ahead of the pace for 2019.
“Homebuilders are still catching up and pulling permits from an increase in sales this summer and fall,” said Gary Kraemer, president of Housing First Minnesota, in a statement. “We expect this trend to continue into winter as homebuyers are eager to make the move, interest rates remain low and the existing housing market has too few homes to choose from.”
The trend is not unique to Minnesota.
New statistics on Tuesday morning from the U.S. Census Bureau showed that the value of U.S. residential construction was up 14.6 percent in October compared to the previous year. October’s numbers also reflected a 2.9 percent project value increase compared to the previous month.
Metro multifamily projects also saw robust activity in November with permits pulled for 857 units – an increase of 24 percent compared to a year ago. But year-to-date, multifamily permits are down by a notable 16 percent compared to 2019. Even so, permits have been pulled for 7,168 apartment units so far this year.
The flipside of the single-family building boom is that it’s increasingly harder to find affordable “starter homes” in the market.
“While we are pleased to see strong demand, we are increasingly concerned about affordability as low inventory, a skilled labor shortage and supply chain problems from the global pandemic have only added to the price of a new home in Minnesota,” said David Siegel, executive director of Housing First Minnesota, in a statement. “It is more important than ever that we look at new ways to bring down the cost of new homes. Put simply, too many Minnesota families are being priced out of homeownership.”