The Twin Cities continues see more homebuyers than there are homes for sale, which is pushing permits for new homes to numbers not seen since 2006. Single-family homes continue to be the most desired option in the market with permits up 70% over last May and up 50% for the year. The surge in demand for new homes comes at a time when there are numerous headwinds for builders including regulatory barriers to development, a lumber crisis and a labor shortage.
“Builders are seeing powerful demand from homebuyers and the permit numbers reflect that,” said Todd Polifka, 2021 president of Housing First Minnesota. “Unfortunately, the surge in new homes being built is still inadequate to meet the number of new homes needed in our region to bring our housing market to a healthy balance.”
According to data compiled by the Keystone Report for Housing First Minnesota, there were 743 permits issued for a total of 1,284 units during four comparable weeks in the month of May.
“There is an alarmingly low supply of homes available in the Twin Cities, which is causing prices to rise unsustainably,” said David Siegel, executive director of Housing First Minnesota. “We have a strong need for homes in the modestly priced new home sector. We can’t get there because on top of the rising costs of lumber and labor, we also have barriers put in place such as required designer exterior finishes, minimum lot sizes, minimum garage stalls and other local requirements that drive up the cost of housing.”
For the month, Cottage Grove took the top spot with 50 permits issued. Lakeville came in next with 49 permits, followed by Woodbury with 45 permits. St. Michael with 38 permits and Dayton and Otsego both with 34 permits rounded out the top five.
