Permits for Single-Family Homes in the Twin Cities Hit 16-Year High in 2021 Despite Construction Headwinds

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December residential permits fell in 2021, but not by enough to offset the strong start to the year

Following a feverish start to the year, the pace of new residential construction slowed as 2021 came to a close reflecting the numerous challenges on the horizon for the construction industry. Even with the end-of-year slowdown, total permits for new homes in the Twin Cities for 2021 marked a 16-year high.

Area homebuilders pulled 629 permits for new single-family homes in December, an 8% drop from December of last year. Twin Cities multifamily construction slowed to a lull in December, with permits pulled for just 268 units, a 58% drop from this month last year.

“The shortage of homes for sale in the Twin Cities and the demand for new housing has now reached a level that we have not seen before,” said Todd Polifka, 2021 president of Housing First Minnesota. “The supply and demand problem, regulatory restrictions, labor shortage, lot shortage and supply chain issues are adding up to a very challenging market for builders to overcome in order to meet the needs of our housing consumers.”

According to data compiled by the Keystone Report for Housing First Minnesota, there were 659 permits issued for a total of 897 units during four comparable weeks in the month of December. For the year, there were 7,811 permits issued for 15,073 units in the Twin Cities.

“With so few resale homes on the market, more homebuyers chose to build new in 2021 than we’ve seen since 2005,” said David Siegel, executive director of Housing First Minnesota. “Our overall concern with the shortage of homes for sale is the impact that is having on overall prices of homes in our market. At a time when builders cannot build at the lower price points due to development costs, labor costs and supply chain costs, we ask our government leaders to step in and make substantial housing reforms, before our housing market leaves even more Minnesotans out of options and relegated to the sidelines.”

For the year, Lakeville took the top spot with 669 permits issued. Woodbury came in next with 536 permits. Cottage Grove with 485 permits, Otsego with 391 permits and Blaine with 368 permits rounded out the top five.

Download the December data chart >>