Single-Family Permits Surge as Multifamily Construction Faces Slowdown
Single-family construction permits surged across the U.S. through October, signaling a shift in the housing market as developers ramp up activity ahead of the new year. According to a report from the National Association of Home Builders (NAHB), the single-family sector saw widespread growth, particularly in the West and Midwest, while multifamily construction contracted sharply in most regions.
The West led the charge in single-family construction, with a 13.6% year-to-date (YTD) increase in new permits, reflecting ongoing demand for new homes. The Midwest followed with a 12.4% increase, and the Northeast saw a more modest but significant 10.8% rise in permits compared to October 2023. The South, however, posted a smaller growth rate of 7.2%, indicating more stabilized or slower-paced development in some regions.
Texas, a major player in the housing market, led the nation with 136,374 single-family permits issued, up 9.7% from the previous year. Florida and North Carolina also saw notable increases, following Texas' lead in the single-family construction boom.
This surge in single-family permits points to a nationwide response to ongoing housing demand. With 46 states reporting year-over-year increases, builders are adjusting strategies to meet growing housing needs. This growth may help alleviate the housing shortage, particularly in high-demand areas, and support future household formation.
The NAHB found that the following metros filed the highest number of new residential permits in October:
- Houston-Pasadena-The Woodlands, Texas – 45,310 permits (+4% year-over-year)
- Dallas-Fort Worth-Arlington, Texas – 40,563 (+13%)
- Phoenix-Mesa-Scottsdale, Arizona – 26,296 (+29%)
- Atlanta-Sandy Springs-Roswell, Georgia – 22,340 (+9%)
- Charlotte-Concord-Gastonia, North and South Carolina – 16,266 (0%)
- Austin-Round Rock, Texas – 14,468 (+1%)
- Orlando-Kissimmee-Sanford, Florida – 12,779 (-13%)
- Nashville-Davidson-Murfreesboro-Franklin, Tennessee – 12,609 (+4%)
- Raleigh, North Carolina – 11,760 (+11%)
- Tampa-St. Petersburg-Clearwater, Florida – 11,414 (-7%)
While the NAHB found an uptick in new residential permits, it also noted that multifamily construction is facing challenges. Total multifamily permits reached 403,422 year-to-date in October, reflecting a 16.2% decline from the 481,612 issued during the same period last year. The decline was especially pronounced in the South, West, and Midwest, where permits fell by double digits in many areas.
However, the Northeast stood out as the only region to see an increase, climbing 26.6% YTD, largely driven by strong growth in New York, which saw a 50.0% increase in multifamily permits. Other top-performing markets included Boston and Philadelphia.
These trends suggest developers are shifting focus, with single-family homes driving growth while multifamily construction faces more headwinds.
Source: GlobeSt/ALM