Twin Cities Homebuilding Shows Strength Despite Rising Interest Rates

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Permits for Single-family homes increase 66% in August

ROSEVILLE, MINN.  — Twin Cities single-family home construction saw strong gains in August even as interest rates reached a 20-year high. Metro builders pulled permits for 571 single-family homes during the month, a 66% increase from August of last year. Multifamily construction; however, continued to stumble with permits pulled for 373 units, a 15% drop in units compared to this same time last year.

“Interest rates are having impacts across all areas of the housing market,” said John Quinlivan, 2023 board chair of Housing First Minnesota. “However, new construction continues to attract eager buyers due to lack of supply in the existing market paired with the ability to offer opportunities other sectors of the market can’t.”

There were 597 permits issued for a total of 944 units during four comparable weeks in the month of August, according to the Keystone Report.

“With interest rates hitting new highs and inventory showing little signs of improvement, we grow ever more concerned about housing affordability in our region, said James Vagle, CEO of Housing First Minnesota. “Although homebuilders are working to fill this gap, without action from the legislature, our housing market will continue to price out first-time and move-up buyers.”

For the month in permits, Rosemount took the top spot with 45 permits issued. Cottage Grove came in next with 40 permits. Woodbury with 39 permits, and Maple Grove and Lakeville both with 38 permits rounded out the top five.

For the month in units, Cambridge came in on top with 149 permitted units. Rosemount came in next with 126 units, followed by Lakeville with 124 units. Cottage Grove with 40 units and Woodbury with 39 units rounded out the top five.

Download the August chart >>