It’s clear the sharp rise of interest rates is taking its toll on the new single-family construction in the metro, with permits dropping for the second consecutive month in June. Meanwhile developers are surging ahead with plans for new apartments in the Twin Cities with another triple-digit increase over this month last year. Homebuilders pulled 576 permits for new single-family homes for the month, a 10% drop from last June. This month, permits were pulled for 2,093 multifamily units, with a majority of the units being in the suburbs.
“Homebuilders continue to feel a slowdown from the sharp rise in interest rates this spring,” said James Julkowski, the 2022 president of Housing First Minnesota. “We’re seeing some normalcy in traffic and seasonality return to the housing market, but we remain concerned about affordability as more homebuyers are forced to the sidelines from high interest rates.”
According to data compiled by the Keystone Report for Housing First Minnesota, there were 637 permits issued for a total of 2,669 units during four comparable weeks in the month of June.
“The demand for homeownership is still incredibly strong in our community,” said James Vagle, the executive director of Housing First Minnesota. “Short term, we expect interest rates to impact buyer’s decisions and timing; long term, our housing market remains undersupplied. We need new single-family homes to balance that out.”
For the month in permits, Cottage Grove took the top spot with 67 permits issued. Lakeville came in next with 45 permits, followed by Blaine with 40 permits. Woodbury with 38 permits and St. Michael with 31 permits issued rounded out the top five.
For the month in units, Edina took the top spot with 412 permitted units. Bloomington came in next with 405 permitted units, followed by Minneapolis with 252 units. Cottage Grove with 242 units and Maple Grove with 215 permitted units rounded out the top five.
Download the June Data Chart >>
