Construction for new single-family homes picked up significantly in September as low interest rates and pent up demand continue to impact the housing market. With 650 permits pulled, single-family construction jumped by 38% over September of 2019. That’s the highest number of single-family permits pulled in the month of September since 2005.
“As inventory of existing homes for sale continues to drop, we’re seeing increased interest from homebuyers looking to build,” said Gary Kraemer, president of Housing First Minnesota. “On top of the pent-up demand, many buyers are now looking for more space to work remotely and are willing to look further into the suburbs as they may no longer have a commute to consider.”
According to data compiled by the Keystone Report for Housing First Minnesota, there were 697 permits issued for a total of 1,135 units during four comparable weeks in the month of September.
While the number of permitted units for large multifamily construction fell by 68%, the number of permitted units for townhome construction was up a sharp 150%.
“While we are pleased to see homebuilding activity continue to lead the economic recovery, we remain deeply concerned about the challenge of housing affordability,” said David Siegel, executive director of Housing First Minnesota. “Following more than a decade of underbuilding, our housing market is extremely undersupplied. This is causing existing home prices to continue their steep climb. Those in existing homes cannot move to their new moveup home, breaking the entire ecosystem. A powerful uptick in homebuilding is necessary to provide some relief to the entire housing market. We’ve got to able to reintroduce starter homes into this market, and with today’s regulatory roadblocks, we simply cannot.”
For the month, Lakeville took the top spot with 77 permits issued. Otsego came in next with 44 permits issued. Rosemount with 40 permits and Hugo, Plymouth, Ramsey, and St. Michael all with 23 permits rounded out the top five cities in September.
