There were 42.3 new homebuilding permits per 100,000 residents issued nationwide in May 2023, up from 32.9 in May 2020 — the early months of the COVID-19 pandemic.
- That's per a new Axios analysis of U.S. Census Bureau data.
Why it matters: A post-pandemic nationwide housing shortage is keeping prices high.
- Recent estimates from Freddie Mac indicate the U.S. is short about 3.8 million units of housing, either for rent or purchase, Axios' Emily Peck reports.
- A bump in new home construction, however, could bring prices down — it's basic supply and demand.
By the numbers: In May 2023, 139,600 total permits were issued across the U.S. — the majority of which (88,900) were for single-family homes.
- Nearly 46,000 were issued for buildings with five or more units, and nearly 5,000 were for those with between two and four units.
Zoom in: Some cities are seeing an especially significant explosion in new home construction as a post-pandemic reality takes hold.
- In Raleigh, for example, 138 new permits per 100,000 residents were issued in May 2023, up from 71.7 in May 2020.
State of play: While many newly built homes have been targeted at (and thus priced for) relatively wealthier buyers, homebuilders are starting to focus on more affordable projects for first-time homebuyers, per Axios' Matt Phillips.
What they're saying: "It's a renewed focus, given the lack of inventory," Robert Dietz, chief economist at the National Association of Home Builders, told Matt.
- "First-time buyers are going to play a key role in the order expansion for homebuilders going forward."
Yes, but: "There's little sign of a Levittown-style surge of modest-home construction to magically solve the inventory problem any time soon," Matt writes.
- Plus, even if costs come down, mortgage rates remain relatively high.
Editor’s note: The chart above has been corrected to reflect that nationwide homebuilding permits increased by 9.5 per 100,000 residents between May 2020 and May 2023, they did not decrease by 9.5 per 100,000 residents. The story has also been corrected to reflect that the figures are based on 100,000 residents, not “per capita.”
