Twin Cities new homebuilding permit applications lowest since 2016
Twin Cities builders pulled permits for the fewest number of new housing units since 2016 during the month of February.
(FOX 9) - As low mortgage rates, high housing demand and low inventory continue to be the themes of the real estate industry in 2022, Twin Cities builders pulled permits for the fewest number of new housing units since 2016 during the month of February.
According to data compiled by the Keystone Report for the Housing First Minnesota, in February permits for new single-family homes dropped by 17 percent, with 432 permitted units being applied for development compared to last year.
Large multifamily projects that include 17 units or more also declined 60 percent in the number of permitted units year-over-year.
However, small multifamily construction was the only sector that saw growth, with permits pulled for 129 units – a 118 percent increase compared to February of last year.
A total of 460 permits were issued, for a total of 698 units, during four comparable weeks in the month of February. Lakeville and Woodbury tied for the most permits approved with 39 permits issued in each city. Shakopee was second with 29 permits, followed by Otsego with 25.
"Our housing market is in dire need of new homes and unfortunately the home building environment in the Twin Cities it not one that makes this easy to do," said James Julkowski, 2022 president of Housing First Minnesota in a statement. "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."
The Housing First Minnesota Foundation is the charitable arm of Housing First Minnesota, an association of builders, remodelers, suppliers, and trade partners. The Foundation is the HomeAid Minnesota affiliate of HomeAid America, a national nonprofit provider of housing and resources for people experiencing homelessness, operating through a network of 19 chapters in 13 states.
As new home prices have soared across the state in the last decade, Minnesota lawmakers have looked to address starter home shortages.
"A slowdown in the pace of new home building 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 in a statement. "Without an increase in new homes coming to market, the shortage of homes will continue to force homebuyers to outbid each other, pushing home prices up at an alarming rate."