The impacts of historically low existing housing inventory and low mortgage rates continue to push demand for new single-family homes in the Twin Cities to highs not seen since 2004. For the month of March there were 631 permits pulled for single-family homes, an increase of 50% over March of 2020. Multifamily construction in the metro continues to see lackluster permit activity with permits pulled for 323 units, a 1% drop from last March.
“We are seeing the impacts of having the millennial generation at peak home buying ages while boomers are also in the market for their move-down home, all while there is a historic shortage of homes for sale in the Twin Cities,” said Todd Polifka, 2021 president of Housing First Minnesota. “Our housing market is in dire need of new single-family homes at all price points, and homebuilders are doing their best to meet that demand.”
According to data compiled by the Keystone Report for Housing First Minnesota, there were 648 permits issued for a total of 954 units during four comparable weeks in the month of March.
“On top of the challenges builders have been navigating for years, such as regulatory barriers and a labor shortage, we are now adding supply chain issues from the global pandemic and a lumber shortage, all of this is driving the cost of new homes in the Twin Cities,” said David Siegel, executive director of Housing First Minnesota. “We need to look at new ways to bring down the cost of housing to balance out our drastically undersupplied housing market.”
For the month, Lakeville took the top spot with 58 permits issued. Woodbury came in next with 54 permits, followed by Dayton with 47 permits. Cottage Grove with 45 permits and Otsego with 34 permits rounded out the top five.
