This Interactive Map Shows Which Housing Markets Have A Growing Supply Of New Homes

Source: Fast Company, Lance Lambert
Photo: Jeffrey Czum/Pexels; Vlado Paunovic/Unsplash

The Sun Belt—particularly Texas—continues to dominate the nation’s homebuilding landscape.

Want more stories from Lance Lambert’s ResiClub in your inbox? Subscribe to the daily free ResiClub newsletter.

While permit activity for new home construction has dipped from the height of the pandemic housing boom, with permits in October 2023 dropping 13% below October 2021 levels, the homebuilding sector remains steady. Despite deteriorated housing affordability, and mortgage rates hitting the 8% mark this fall (before falling this month), October 2023 witnessed a level of permit issuance comparable to that of pre-pandemic October 2019, according to the most recent data.

Construction of multi-family homes showed signs of weakening, with permits for buildings with at least 5 units falling 26% year over year. In contrast, single-family home permits have experienced a resurgence from last fall’s slump, jumping 14% between October 2022 and October 2023.

What’s driving this single-family resilience?

To maintain single-family home sales, builders like Lennar and KB Home have chosen to trim their frothy pandemic-era margins a bit. Instead of outright price reductions, the prevailing method has been to offer mortgage rate buydowns. These 4% and 5% mortgage rates are attracting buyers who otherwise would have turned to the existing home market.

Even in housing markets experiencing a slump, such as Austin, where home prices according to the Zillow Home Value Index have dropped by 18% from their peak, single-family builders remain active. Surprisingly, Austin secured the third-highest number of permits issued nationwide in October—and the most permits per capita—underscoring that builders aren’t turning away from Texas.

The Sun Belt continues to dominate the nation’s homebuilding landscape, a trend predating the pandemic frenzy. The U.S. Census Bureau’s data for October reveals the following top 10 markets in terms of permits issued:

Dallas, TX (6,137)
Houston, TX (5,453)
Austin, TX (4,261)
Phoenix, AZ (3,955)
Atlanta, GA (3,177)
New York, NY (3,105)
Charlotte, NC (2,695)
Tampa, FL (2,213)
Raleigh, NC (2,149)
Indianapolis, IN (1,870)

In the wake of soaring mortgage rates, single-family homebuilding has displayed resilience, defying fears of an outright homebuilding bust in 2023. This year, at least, mortgage rate buydowns did the trick.

https://www.fastcompany.com/90999546/housing-market-map-housing-permits