Despite a 13% drop in permits for new home construction compared to October 2021, the homebuilding sector remains steady. October 2023 saw a level of permit issuance comparable to that of pre-pandemic October 2019, despite deteriorated housing affordability and mortgage rates hitting 8% this fall (before falling this month).
While multi-family home construction has shown signs of weakening, single-family home permits have experienced a resurgence, jumping 14% between October 2022 and October 2023.
Builders like Lennar and KB Home have chosen to offer mortgage rate buydowns instead of outright price reductions to maintain single-family home sales, attracting buyers who otherwise would have turned to the existing home market.
In housing markets experiencing a slump, such as Austin, single-family builders remain active. Austin secured the third-highest number of permits issued nationwide in October and the most permits per capita, underscoring that builders aren’t turning away from Texas despite a drop in home prices.
The top 10 markets in terms of permits issued in October are dominated by the Sun Belt, with Texas leading with Dallas, Houston, and Austin securing the top three spots.
In the wake of soaring mortgage rates, single-family homebuilding has displayed resilience, defying fears of an outright homebuilding bust in 2023.
The U.S. Census Bureau’s data for October reveals the following top 10 markets in terms of permits issued:
- Dallas, TX (6,137)
- Houston, TX (5,453)
- Austin, TX (4,261)
- Phoenix, AZ (3,955)
- Atlanta, GA (3,177)
- New York, NY (3,105)
- Charlotte, NC (2,695)
- Tampa, FL (2,213)
- Raleigh, NC (2,149)
- Indianapolis, IN (1,870)