Multi-Family Construction Surpassed Single-Family Homebuilding in July
Twin Cities metro homebuilders are constructing more multi-family homes than single-family ones. That’s according to data released by homebuilding trade group Housing First Minnesota on Friday. In July, construction firms pulled permits for 987 multi-family units, a 50% increase from the same month last year. In total, multi-family construction now makes up 70% of permitted housing units year-to-date.
Meanwhile, permits for single-family homes declined. In July, homebuilders pulled permits for 383 single-family units, representing a 33 percent year-over-year decline.
Many would-be buyers have been negatively affected by high interest rates, which has caused a significant slowdown in single-family home construction, according to Housing First.
“The desire for homeownership remains strong, but higher interest rates are pushing many buyers to press pause,” said James Julkowski, Housing First Minnesota’s 2022 president, in a news release. “A silver lining, after two years of a frenzied housing market, supply chain problems are improving, timelines for building are shrinking, and buyers now have more opportunities in this changing market.”
A total of 425 permits were issued for 1,370 units in July, according to Housing First’s monthly Keystone Report.
“As the pace of homebuilding slows, we are growing more concerned about adding to the current shortage of homes in our market,” said James Vagle, Housing First Minnesota’s executive director, in the release. “It’s more important than ever that we take a look at the regulatory challenges and outdated zoning restrictions that are driving up the cost of housing, so homebuilders can get back to producing more starter homes for Minnesota families.”
Lakeville led the month in permits with 28, followed by St. Michael with 26. In units, Minneapolis held the top spot with 416. Blaine was second with 209 permitted units.