Few MSAs Seeing Significant Growth in Single-Family Building Permits
Single-family home construction remains sluggish on a national basis year-to-date through July, with single-family building permits down -6.7% year-over-year (YOY) from July 2024 to an annual pace of 875,000.
Comparatively few of the largest markets for single-family building permits (see chart on page 2) are running better than this pedestrian pace. Higher mortgage rates, a lack of starter homes in many markets and a smaller pool of first-time home buyers are tamping down demand, which typically accounts for between 15% and 20% of sales through electrical distributors.
Despite the national residential market’s lengthy slumber, some metropolitan statistical areas (MSAs) are topping the national numbers, including the Orlando-Kissimmee-Sanford, FL, MSA (+7% YOY); the Los Angeles-Long Beach-Anaheim, CA, MSA (+5.3%); and Cape Coral-Fort Myers, FL (+3.6%). On the other end of the spectrum are some large metros with double-digit year-over-year declines, including Dallas-Fort Worth-Arlington, TX, MSA (-11.7%); Phoenix-Mesa-Chandler, AZ, MSA (-15.5%); Atlanta-Sandy Springs-Roswell, GA, (-15%); and Raleigh-Cary, NC, MSA (-12.5%).
As is usually the case, a handful of states in the Sunbelt account for a major share of the activity. Of the 50 largest MSAs for single-family building permits, 20 of them are in just four states: Florida (8); South Carolina (4); Texas (4); and North Carolina (4).
Despite the lengthy slowdown in residential building, single-family building permits are still a reliable indicator of future residential and light-commercial building. Home builders typically don’t purchase building permits unless they are serious about breaking ground, and once new housing developments go in, light-commercial construction follows.
To check out permit data for a local market, use your mouse to hover over the area of interest, and then click on it. A "tool tip" with housind data will pop up. You can also download the data by clicking on the link below.
