While multifamily construction continues to soar ahead, single-family construction shows signs of strain on the market. There were 559 permits pulled for new single-family homes for the month, an 18% drop from May of last year. Permits were pulled for 1,529 multifamily units, more than a 450% increase from last May.

“Homebuilders are feeling the impacts of rising interest rates as homebuyers deal with the reality of what they can afford with the new rates,” said James Julkowski, 2022 president of Housing First Minnesota. “Low interest rates have long shielded homebuyers from the rising affordability issue in our state, as it has become increasingly more expensive to build new homes with the steep regulatory costs in our region, the supply chain challenges and the labor shortage.”

According to data compiled by the Keystone Report for Housing First Minnesota, there were permits issued for a total of 3,609 units during four comparable weeks in the month of April.

“Homeownership is incredibly important to both the health and generational wealth of our communities,” said Julkowski. “We grow more concerned about the number of homebuyers that are being priced out of our housing market and are forced to put their dreams of homeownership on hold.”

For the month in permits, Lakeville took the top spot with 63 permits issued. Blaine came in next with 38 permits, followed by Shakopee with 37 permits. St. Michael with 27 permits and Cottage Grove with 26 permits issued rounded out the top five.

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