Permits for new single-family homes in the Twin Cities metro continue to slow as homebuilders see more buyers impacted by higher interest rates and affordability. At the same time multifamily construction has surged ahead in the metro area, now making up nearly 70% of permitted housing units year-to-date. For the month, homebuilders pulled 383 permits for new single-family homes, a 33% drop from last July. Construction firms pulled permits for 987 multifamily units, a 50% increase from July 2022.
“The desire for homeownership remains strong, but higher interest rates are pushing many buyers to press pause,” said James Julkowski, the 2022 president of Housing First Minnesota. “A silver lining after two years of a frenzied housing market, supply chain problems are improving, timelines for building are shrinking and buyers now have more opportunities in this changing market.”
According to data compiled by the Keystone Report for Housing First Minnesota, there were 425 permits issued for a total of 1,370 units during four comparable weeks in the month of July.
“As the pace of homebuilding slows, we are growing more concerned about adding to the current shortage of homes in our market,” said James Vagle, the executive director of Housing First Minnesota. “It’s more important than ever that we take a look at the regulatory challenges and outdated zoning restrictions that are driving up the cost of housing, so homebuilders can get back to producing more starter homes for Minnesota families.”
For the month in permits, Lakeville took the top spot with 28 permits issued. St. Michael came in next with 26 permits, followed by Otsego with 25 permits. Woodbury with 21 permits and Minneapolis with 19 permits issued rounded out the top five.
For the month in units, Minneapolis took the top spot with 416 permitted units. Blaine came in next with 209 permitted units, followed by Mahtomedi with 110 units. St. Michael with 87 units and New Richmond, WI with 62 permitted units rounded out the top five.
