Twin Cities builders pulled permits for the fewest number of housing units for the month of February since 2016. Permits for new single-family homes dropped by 17% in February with 432 permitted units. Large multifamily projects, 17-units or more, saw a 60% drop in the number of permitted units compared to last February. Small multifamily construction was the only sector seeing growth in the month, with permits pulled for 129 units, a 118% increase compared to February of last year.
“Our housing market is in dire need of new homes and unfortunately the homebuilding environment in the Twin Cities it not one that makes this easy to do,” said James Julkowski, 2022 president of Housing First Minnesota. “The slight slowdown we are seeing in the permit numbers reflects the challenging home construction environment, not the demand for housing, which remains overwhelmingly strong.”
According to data compiled by the Keystone Report for Housing First Minnesota, there were 460 permits issued for a total of 698 units during four comparable weeks in the month of February.
“A slowdown in the pace of new homebuilding is not a trend we want to see continue, but it is not surprising with supply chain issues, a labor shortage, and overall unfavorable regulatory environment in our region.” said David Siegel, executive director of Housing First Minnesota. “Without an increase in new homes coming to market, the shortage of homes will continue to force homebuyers to outbid each other for each home, pushing home prices up at an alarming rate.”
For the month, Lakeville and Woodbury tied for the top spot with 39 permits issued. Shakopee came in next with 29 permits, followed by Otsego with 25 permits. Cottage Grove rounded out the top five with 24 permitted units.
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