For the second month in a row single-family construction in the Twin Cities saw a drop in activity when compared to the same month of the previous year. The slowdown reflects the growing number of market and regulatory challenges that continue to hinder builders’ ability to bring new homes to the region. Twin Cities homebuilders pulled 564 permits for new single-family homes in September, a 13% drop from last year. Multifamily construction had a strong month with 1,152 permitted units, more than a 100% increase from September of last year.
“Homebuyer activity is still high, but it’s slowed from the fervent pace that we saw this time last year,” said Todd Polifka, 2021 president of Housing First Minnesota. “As prices have gone up due to supply chain issues, permit delays and overall regulatory costs, we’re seeing more homebuyers forced to sit on the sidelines of the housing market.”
According to data compiled by the Keystone Report for Housing First Minnesota, there were609 permits issued for a total of 1,761 units during four comparable weeks in the month of September.
“The Twin Cities housing market has some of the lowest housing inventory in the country, with the greatest need for homes at the lower price points,” said David Siegel, executive director of Housing First Minnesota. “Unfortunately builders are currently unable to supply the market with those lower priced homes and too many Minnesotans are being shut out. On top of our regulatory challenges and the lack of available land, prices are being pushed higher by a construction industry labor shortage and supply chain disruption. We need all parties to come to the table to create an environment in which starter homes can once again be brought to our marketplace.”
For the month, Woodbury took the top spot with 55 permits issued. Lakeville, Rosemount and Blaine all came in next with 36 permits. Ramsey rounded out the top five with 34 permits.
