Homebuilding in the Twin Cities was down last month, but not nearly as sharply as earlier this year.
That's according to a monthly report from Housing First Minnesota, which tracks building permits throughout the metro. It showed builders pulled enough permits to build 487 single-family homes, 13% fewer than last year.
That decline follows several months of much larger year-over-year declines. Since the beginning of the year, single-family permits have been down by at least 40% compared with the same months last year.
"After a slow spring, homebuilders are ready to build the homes that the Twin Cities desperately needs," said John Quinlivan, a Twin Cities builder and board chair of Housing First Minnesota. "Rising mortgage rates continue to be a hurdle for homebuyers.
He and other builders said the lack of existing homes is forcing some buyers to consider a newly built home. During April, just 5,170 new listings hit the market — nearly 30% fewer than last year at the same time — according to the Minneapolis Area Realtors. At the current sales pace, there were only listings to last a month and a half, far below the four to six months needed for the market to be evenly balanced between buyers and sellers.
While the supply of existing homes was down 19%, there was a 31% increase in the number of new homes available to buyers.
Multifamily construction continued posting significant and persistent declines. During the month, builders gained enough permits to build 514 units, a 66% decline from May 2022.
Multifamily permits, most of which are for market-rate rental buildings, tend to be volatile from month to month because a single project can have several hundred units.
