Rising interest rates continue to have a major impact on homebuilding in the Twin Cities. For the month of October, homebuilders pulled permits for 276 new single-family homes, a 54% drop from last year. Multifamily construction also slumped in October, with permits pulled for 460 units, a 60% drop from October of last year.
“Homebuyers are pressing pause on their purchasing decisions as they reevaluate what they can afford with today’s interest rates,” said James Julkowski, the 2022 board chair of Housing First Minnesota. “While the market shifts and many are forced to sit on the sidelines, there are opportunities out there for buyers that we have not seen in recent years.”
According to data compiled by the Keystone Report for Housing First Minnesota, there were 315 permits issued for a total of 736 units during four comparable weeks in the month of October.
“Low interest rates have long been protecting homebuyers from the affordability issues in our housing market,” said James Vagle, the executive director of Housing First Minnesota. “Now more than ever we need to lift the roadblocks to constructing affordably priced homes in Minnesota, or our shortage of housing will continue to grow.”
For the month in permits, Woodbury took the top spot with 11 permits issued. Lakeville came in next with 18 permits, followed by Andover and Maple Grove both with 12 permits. Shakopee, Minneapolis, and Delano each with 11 permits rounded out the top five.
For the month in units, St. Louis Park took the top spot with 223 permitted units. Woodbury came in next with 116 permitted units, followed by New Richmond with 51 units. Minneapolis with 41 units and Lakeville with 21 permitted units rounded out the top five.
