Single-Family Permit Issuance, Construction Jumps in Q2

The second quarter of 2024 has seen solid boosts in both single-family permit issuance and construction across the country, led by a rebound in high-density areas, according to a new analysis by the National Association of Home Builders (NAHB).

But results for multifamily builders were less positive, the NAHB’s Home Building Geography Index revealed. Multifamily construction slowed and permitting continued its downward trend.

Problems developers face include higher interest rates, a shortage of workers and challenges with the supply chain for some building materials, said NAHB chairman Carl Harris.

Single-family permit growth rose in all seven regions the Index covers. However, construction – especially of townhouses – was strongest in higher-density areas. The highest rate of single-family growth was in large metro core counties, defined as primarily suburban areas. This indicated, the analysis said, that teleworking is still a factor, with people moving to more affordable areas.

The dispersal of new single-family construction across the country included 16% in large metro core counties, 25% in large metro suburban counties, 29% in small metro core counties, and the remainder scattered through more distant metro or non-metro counties.

New multifamily construction is similarly concentrated in metro and suburban counties, though its share in large metro core counties is much larger – 40%. Tight financing and high inventory levels remain obstacles. “This weakness is consistent with the NAHB Multifamily Production Index, which had a second quarter reading of just 44, marking a year-over-year decrease of 12 points,” the report noted.

On the other hand, both single-family and multifamily performed well in “second-home areas” – defined as counties where at least 10.3% of the total housing stock consists of a second home” — with Hamilton County, NY the national leader having 75.3% of its housing stock in this category.