Residential construction permits up annually by over 25% through August

The number of new residential permits issued so far this year substantially outpaced COVID-impacted figures during the equivalent period in 2020 for both single- and multifamily housing.

The number of new single-family permits through the end of August came in at 775,772, an increase of 25.8% from 616,856 last year, according to the National Association of Homebuilders. Multifamily permits also rose at a similar rate, jumping 27.5% to 392,067 from the August 2020 level of 307,614.

Increases in single-family permits occurred across regions, jumping the most in the Northeast, which experienced a 29.3% rise, while every other area also saw gains of more than 20%. The South reported 26.4% more permits, followed by the West at 25.7% and the Midwest with 21.6%.

“The District of Columbia recorded the highest growth rate during this time at 208.0% from 87 to 268,” noted Danushka Nanayakkara-Skillington, the association’s assistant vice president for forecasting and analysis, in a blog post.

Although the nation’s capital and Northeast experienced the largest percentage increases, the list of the 10 most active single-family-permit markets is dominated by cities in the South and West. The greater Houston area leads the nation, issuing the most new single-family permits so far this year with 36,359, followed by the Dallas-Fort Worth metroplex with 35,572. In third is the Phoenix area, which recorded 25,209 permits.

“The 10 states issuing the highest number of single-family permits combined accounted for 62.3% of the total single-family permits issued,” Nanayakkara-Skillington said.

The sustained rise in permits issued, along with a pick-up in construction spending over the summer, comes as promising news for the homebuilding industry after a year of supply-chain worries and elevated cost of building materials.

Year-to-date multifamily permits also increased in all four regions on a year-over-year basis, with 38 states increasing their numbers compared to August 2020, while 12 states and the District of Columbia reported declines.

The West led the way in the number of new multifamily housing permits, up 33.7% annually, followed by the Northeast, which experienced 27.2% growth. The Midwest recorded 24.9% more multifamily permits, and the South 24.6%. New Mexico increased its total number of multifamily permits to 1,804 year-to-date, up from 539 at the same point in 2020, an annual rise of 234.7%.

But while the metro areas with the most new single-family permits were concentrated in specific regions, growth in the multifamily segment was more widespread. The New York-Newark-Jersey City statistical area outpaced the rest of the country with 29,058 multifamily permits issued through August this year, ahead of Austin, Texas at 19,543 and Dallas-Fort Worth at 18,869.