Permits for Homes Fell in 2023, Point2 Reports

(Image courtesy of Point2)

Point2, Saskatoon, Saskatchewan, released its Housing Construction Report for the U.S., finding that 70% of U.S. metros experienced declines in permitting in 2023.

Overall, in 2023, Point2 reported the number of homes under construction fell by 9%, and the total number of permits fell by 11% year-over-year. That’s the second consecutive yearly drop–total permits dropped by 5% in 2022.

Homes completed looked good on the surface, but a large chunk of those were multifamily units. There was a 22% increase in those units in 2023, but a 2% decrease in new single-family homes.

“Theoretically, new construction should be bolstered by the acute shortage of housing on the market. However, with supply chain issues piling up and loan rates for builders continuing to rise, developers’ confidence is going in the opposite direction,” wrote Andra Hopulele, Senior Real Estate Writer at Point 2. “And, as both builders and home sellers become more cautious and keep to the sidelines to try to insulate themselves from the negative effects of rising rates and financial uncertainty, their withdrawal might negatively affect supply and affordability in the near future.”

In terms of permits on a regional level, the South is seeing the most activity. It had 821,600 issued last year.

The West saw 344,500, the Midwest had 190,200 and the Northeast had just 114,300.

The top three states by permits were Texas, Florida and California.

The state with the fewest permits was Alaska, with fewer than 1,000 authorized last year.

Metro areas with the most activity were Houston-The Woodlands-Sugar Land, Texas; Dallas-Fort Worth-Arlington, Texas; and Phoenix-Mesa-Chandler, Ariz.