Despite mortgage rates falling to their lowest levels in a year, growing macro-economic concerns are slowing housing market activity. Twin Cities homebuilding reflected this in the month of October, with overall new construction activity up just 5% over last year.
Metro builders pulled 616 permits for single-family homes in October, a 4% increase in activity year-over-year.
Multifamily construction, however, kept its roller-coaster-like pattern over the past year. In October, builders reported 172 multifamily units under construction, a 51% drop from last year. Multifamily activity accounted for less than a quarter of all construction activity for the month.
“It’s encouraging that overall homebuilding in the Twin Cities is still trending slightly above last year’s pace, despite growing economic concerns,” said Art Pratt, board chair of Housing First Minnesota. “The demand for new homes remains strong in our market, and it is essential to maintain this pace to meet that need.’
There were 630 permits issued for a total of 788 housing units during the four comparable weeks in October, according to the Keystone Report.
“Affordability challenges and economic uncertainty are keeping some buyers on the sidelines,” said James Vagle, CEO of Housing First Minnesota. “Addressing the need for homes at all price points will be essential to meeting long-term demand and improving homeownership access in our state.”
For the month in permits, Rosemount took the top spot with 85 permits. Lakeville came in second with 59 permits. St. Michael was next highest with 42. Corcoran was next with 37 permits. Cottage Grove and Shakopee rounded out the top five with 31 permits each.
For the month in units, Apple Valley came in on top with 136 permitted units. Rosemount came next with 85 units, followed by Lakeville with 59 units. St. Michael came fourth highest with 42 units. Corcoran rounded out the top five with 39 units.
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