20 metros where home construction is slowing the most
Simon Kadula // Shutterstock
20 metros where home construction is slowing the most
Builder looking at foundation of a house.
Homebuilding slowed dramatically across the country in 2022 as mortgage rates rose, scaring away potential buyers. The construction starts of single-family homes dropped nearly 19% year over year in September, while building permits fell 17%, according to the Census Bureau.
Building permits are seen as a measure of future construction. In October 2022, home sales dropped for the ninth straight month.
U.S. homebuilders did exceptionally well at the beginning of the coronavirus pandemic. Interest rates fell to a record low, demand soared as people cooped up at home looked for more room, and home prices rose 40% in two years. Homebuilders could not keep up.
But that scenario flipped as interest rates rose and the market suffered a sharp setback.
Three of the top 20 metropolitan areas that made this list are in Arkansas, while another five are in West Virginia. Both states are among the poorest in the country. Arkansas home prices ranked the third-lowest in the country, according to the Arkansas Economic Development Commission. Sixteen of the 20 metropolitan areas are in the South or Midwest.
The metropolitan area that tops the list is Bremerton, Washington, a one-hour ferry ride from Seattle and home to the West Coast’s second-largest naval base, Naval Base Kitsap. Housing prices are flat across the Seattle area compared to a year ago, and in Kitsap County, the median home sold for $505,471 in November, up about 1%.
Nashville MLS analyzed data from the Census Bureau’s Building Permits Survey to rank the top 20 metropolitan areas where construction is slowing the most based on the decrease in approved building permits from January and February 2022 to September and October 2022.
The analysis used two months of data to account for monthly variation and was limited to 236 metros with 100 or more permits in January and February out of the 384 metros with available data. Metro areas often include the identified city, nearby municipalities, and suburbs.
Homebuilders are warning that high interest rates could continue to worry buyers throughout 2023.
TonLammerts // Shutterstock
#20. Chico, California
Real estate contruction site.
– Drop in housing construction permits since early in the year: -52.6%
— Permits authorized January & February: 437
— Permits authorized September & October: 207
Edward H. Campbell // Shutterstock
#19. Sherman, Texas
Water tower with barren trees and a telephone pole on a cloudy day in Sherman, Texas.
– Drop in housing construction permits since early in the year: -53.4%
— Permits authorized January & February: 296
— Permits authorized September & October: 138
Real Window Creative // Shutterstock
#18. Clarksville, Tennessee
An old railroad trestle that has been made into a pedestrian walkway in Clarksville, Tennessee.
– Drop in housing construction permits since early in the year: -54.1%
— Permits authorized January & February: 1,100
— Permits authorized September & October: 505
Wangkun Jia // Shutterstock
#17. Portland, Maine
Portland City Skyline from Portland Observatory on Munjoy Hill in Portland, Maine.
– Drop in housing construction permits since early in the year: -54.1%
— Permits authorized January & February: 993
— Permits authorized September & October: 456
ungvar // Shutterstock
#16. Columbus, Georgia
New residential construction home framing against a blue sky.
– Drop in housing construction permits since early in the year: -55.1%
— Permits authorized January & February: 285
— Permits authorized September & October: 128
Lena Platonova // Shutterstock
#15. Greensboro, North Carolina
New home construction from above.
– Drop in housing construction permits since early in the year: -56.3%
— Permits authorized January & February: 693
— Permits authorized September & October: 303
Matt Gush // Shutterstock
#14. Salinas, California
Salinas arch way in the historic city center of Salinas, California.
– Drop in housing construction permits since early in the year: -58.6%
— Permits authorized January & February: 222
— Permits authorized September & October: 92
Imagenet // Shutterstock
#13. Baltimore
Low rise wooden framework of a building on a concrete base.
– Drop in housing construction permits since early in the year: -59.2%
— Permits authorized January & February: 1,539
— Permits authorized September & October: 628
J.D.S // Shutterstock
#12. Kennewick, Washington
Tri-Cities Washington area view from high vantage point.
– Drop in housing construction permits since early in the year: -59.5%
— Permits authorized January & February: 482
— Permits authorized September & October: 195
ThomasPhoto // Shutterstock
#11. New Bern, North Carolina
New home under construction in a neighborhood development.
– Drop in housing construction permits since early in the year: -62.0%
— Permits authorized January & February: 192
— Permits authorized September & October: 73
New Home Construction // Shutterstock
#10. Montgomery, Alabama
Drone aerial view of downtown Montgomery.
– Drop in housing construction permits since early in the year: -63.0%
— Permits authorized January & February: 173
— Permits authorized September & October: 64
Jacob Boomsma // Shutterstock
#9. Provo, Utah
Aerial view of downtown Provo, Utah, during summer.
– Drop in housing construction permits since early in the year: -63.2%
— Permits authorized January & February: 2,035
— Permits authorized September & October: 749
Paul W Thompson // Shutterstock
#8. Ogden, Utah
Houses and sky line of Ogden, Utah.
– Drop in housing construction permits since early in the year: -65.8%
— Permits authorized January & February: 1,239
— Permits authorized September & October: 424
karamysh // Shutterstock
#7. Goldsboro, North Carolina
A new home under construction.
– Drop in housing construction permits since early in the year: -66.7%
— Permits authorized January & February: 147
— Permits authorized September & October: 49
Sean Pavone // Shutterstock
#6. Savannah, Georgia
Historic downtown sidewalks and rowhouses of Savannah, Georgia.
– Drop in housing construction permits since early in the year: -66.9%
— Permits authorized January & February: 812
— Permits authorized September & October: 269
John T Callery // Shutterstock
#5. Olympia, Washington
City view of Olympia, Washington.
– Drop in housing construction permits since early in the year: -70.0%
— Permits authorized January & February: 323
— Permits authorized September & October: 97
Leena Robinson // Shutterstock
#4. Wenatchee, Washington
New home construction framing.
– Drop in housing construction permits since early in the year: -73.3%
— Permits authorized January & February: 318
— Permits authorized September & October: 85
Thomas Barrat // Shutterstock
#3. Colorado Springs, Colorado
Aerial view of housing development in Colorado Springs, Colorado.
– Drop in housing construction permits since early in the year: -73.6%
— Permits authorized January & February: 2,298
— Permits authorized September & October: 607
Jacob Boomsma // Shutterstock
#2. Muskegon, Michigan
Aerial view of Muskegon, Michigan.
– Drop in housing construction permits since early in the year: -77.1%
— Permits authorized January & February: 253
— Permits authorized September & October: 58
ungvar // Shutterstock
#1. Bremerton, Washington
Wood framing for a new home under construction.
– Drop in housing construction permits since early in the year: -79.4%
— Permits authorized January & February: 533
— Permits authorized September & October: 110
This story originally appeared on Nashville MLS and was produced and
distributed in partnership with Stacker Studio.
