November 28, 2022

Portalcot

Interior spice

April was best on record for home builders in the Twin Cities area

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April was the best-on-record for home builders in the Twin Cities, a sudden surge of activity after a sluggish start to the year.

Builders pulled 793 permits to build 3,609 houses and apartments in the metro, according to a monthly report from Housing First Minnesota.

That total included 750 single-family permits and enough permits to build 2,859 multifamily units, mostly market-rate rentals. That was a 12% increase in single-family permits and a ninefold increase of multi-family units.

Normally, permits are about evenly split between single- and multi-family construction. But last month, multi-family accounted for 80%.

The gains made it the busiest April for homebuilders since at least 2001 and lifted the year-to-date performance into positive territory. Total unit count is now ahead of this time last year by nearly 2,500 units.

James Julkowski, a Twin Cities builder and the president of Housing First Minnesota, said it was a a busy spring for the trade group’s annual new home tour, which ended last month.

“Homebuilders saw strong homebuyer traffic during this spring’s Parade of Homes, signaling that we would potentially see an increase in permits pulled for April,” Julkowski said.

Builders typically pull more permits in early spring as they prepare for the summer home building season. Demand is especially strong now as the shortage of existing houses for sale deepens.

Through the third week of April, there were hundreds fewer new property listings in the Twin Cities compared with last year even as sales increased, according to the latest data from the Minneapolis Area Realtors. By the end of March, there were nearly 12% fewer listings on the market compared with last year at the same time.

“We continue to have a shortage of homes for sale in our region, which is why even with the supply chain constraints, labor shortage, and climbing mortgage rates, we continue to see growth in new home production,” Julkowski said.

Though single-family construction was far more robust than it had been for the past several months, several new apartment projects that are about to start construction in Minneapolis helped cause the outsized increase in multi-family construction.

That included six permits for a whopping nearly 1,500 rentals in Minneapolis where Ryan Cos. is planning to start building 1,050 units in three projects. That includes a 25-story tower with 350 rentals next to U.S. Bank Stadium in downtown Minneapolis.

For the month, Minneapolis was issued the most permits (1,521), followed by Edina with 603 units and Woodbury with 274 units.

“It’s great to see strong gains in new housing units in our region, as we have a severe shortage,” said David Siegel, executive director of Housing First Minnesota, in a statement. “We continue to grow more concerned about affordability, as interest rates rise and more homebuyers are priced out of homeownership.”

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