Home building in the Twin Cities this fall continues at a more tempered pace than last year.
During November, home builders were issued 619 single-family permits, 12% fewer than last year, according to data compiled by the Keystone Report for Housing First Minnesota.
Apartment builders were more active. Builders were issued enough permits to build 877 units in November, mostly market-rate rentals and a 2% increase over the same time last year.
Combined, a total of 661 permits were issued to build 1,496 units, putting builders on pace to best 2020 by 1,250 units. (A single permit can be used to build more than one unit.)
Though demand for housing has been strong and house listings in the Twin Cities remain scarce, home builders have struggled with a variety of issues that have stifled construction.
The rising — and volatile — cost of land, labor and materials has made pricing a home difficult, forcing many builders to limit how far into the future they'll accept an order. And supply-chain issues have also made it difficult to deliver homes on schedule.
"With the supply-chain problems, labor shortage and roadblocks to development we are dealing with, it is no surprise to see permit numbers slow from the all-out blitz of last fall," Todd Polifka, president of Housing First Minnesota, said in a statement.
"Our housing market remains critically undersupplied, and that has home builders on their toes trying to keep up with demand."
Steady price increases are making it difficult for first-time buyers and working-class families to afford a new home, despite mortgage rates that continue to hover near all-time lows.
The median price of a new single-family house in the Twin Cities during October was $460,000, a 7% increase over last year and about $100,000 more than the existing home median, according to the Minneapolis Area Realtors.
On Thursday, Freddie Mac's weekly mortgage survey showed that the 30-year fixed-rate mortgage (FRM) averaged 3.11% for the week ending Dec. 2. That was virtually unchanged from the week before and only a quarter percentage point above the same time last year.
For the month, Lakeville issued the most permits (53) followed by Maple Grove (49) and Cottage Grove (34).