15 cities with the biggest increase in home construction

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Editor’s note: This story was originally published on Construction Coverage.

After a two-year frenzy during the COVID-19 pandemic, the residential real estate market began to show signs of slowing down this spring and summer. Mortgage rates are up and home loan applications are down year over year. The stock of homes for sale is increasing and sellers are more willing to lower their asking prices.

Although there are recent signs that the market is balancing out, the past two years have brought unprecedented growth in home values, to the benefit of current homeowners and builders. With low interest rates, homebuyers were able to borrow more money and pay more for homes. This sent prices to record highs. And with values ​​soaring, builders have rushed to build homes: the number of homes currently under construction is at its highest level since the 1970s.

The value of new residential units had already been on a steady upward trajectory since the collapse of the housing bubble and subsequent Great Recession in the mid-2000s. The annual value of new housing units nearly tripled over the next decade to $280 billion in 2019. But that growth accelerated further during the COVID-19 pandemic, with new units valued at $307 billion. dollars in 2020 and jumping to $380 billion last year.

While interest rate hikes are likely to cool demand and slow the pace of house price increases, the Fed’s recent actions cannot address more fundamental supply issues in the housing market. According to researchers at Freddie Mac, the United States had a 3.8 million unit shortfall in housing supply in 2020. And with labor shortages and rising material costs during pandemic, new construction projects may take longer or cost more.

To determine the metros with the largest increases in home construction, Construction Coverage researchers analyzed the latest data from the US Census Bureau’s Building Permit Survey. The researchers ranked metropolitan areas by the value of authorized residential housing permits from January to April 2022 compared to the same period in 2021.

Here are the US metros with the biggest increase in home construction.

15. Richmond, Virginia

Richmond Virginia Homes
Noel V. Baebler / Shutterstock.com
  • Percentage increase in value of new residential units: +15.3%
  • Total increase in the value of new residential units: $82,553,000
  • Percentage increase in new residential units: +29.2%
  • Total increase in new residential dwellings: +889

14. Tucson, AZ

House in Tucson Arizona
Lindasj22 / Shutterstock.com
  • Percentage increase in value of new residential units: +15.9%
  • Total increase in the value of new residential units: $94,136,000
  • Percentage increase in new residential dwellings: +22.6%
  • Total increase in new residential dwellings: +477

13. Denver-Aurora-Lakewood, CO

Homes in Denver, Colorado
welcome / Shutterstock.com
  • Percentage increase in value of new residential units: +18.2%
  • Total increase in the value of new residential units: $326,017,000
  • Percentage increase in new residential dwellings: +2.3%
  • Total increase in new residential dwellings: +208

12. Charlotte-Concord-Gastonia, NC-SC

Charlotte, North Carolina
Jon Bilous / Shutterstock.com
  • Percentage increase in value of new residential units: +20.2%
  • Total increase in the value of new residential units: $428,476,000
  • Percentage increase in new residential dwellings: +27.5%
  • Total increase in new residential dwellings: +2,443

11. San Diego-Chula Vista-Carlsbad, CA

Rigucci / Shutterstock.com
  • Percentage increase in value of new residential units: +20.4%
  • Total increase in the value of new residential units: $140,372,000
  • Percentage increase in new residential dwellings: +2.8%
  • Total increase in new residential dwellings: +97

10. Minneapolis-St. Paul-Bloomington, MN-WI

Minneapolis, residential area of ​​Minnesota
719production / Shutterstock.com
  • Percentage increase in value of new residential units: +22.1%
  • Total increase in the value of new residential units: $405,987,000
  • Percentage increase in new residential dwellings: +12.3%
  • Total increase in new residential dwellings: +988

9. Houston-The Woodlands-Sugar Land, TX

Houston Homes District
Stephanie A Sellers / Shutterstock.com
  • Percentage increase in value of new residential units: +22.7%
  • Total increase in the value of new residential units: $1,023,183,000
  • Percentage increase in new residential dwellings: +18.2%
  • Total increase in new residential dwellings: +4 138

8. Boston-Cambridge-Newton, MA-NH

Back Bay Boston
Jorge Salcedo / Shutterstock.com
  • Percentage increase in value of new residential units: +23.8%
  • Total increase in the value of new residential units: $282,736,000
  • Percentage increase in new residential dwellings: +6.7%
  • Total increase in new residential dwellings: +371

7. Orlando-Kissimmee-Sanford, Florida

House in Orlando, Florida
Tom Fawls / Shutterstock.com
  • Percentage increase in value of new residential units: +26.8%
  • Total increase in the value of new residential units: $513,628,000
  • Percentage increase in new residential dwellings: +41.8%
  • Total increase in new residential dwellings: +3,526

6. Rochester, New York

House in Rochester, New York
Hank Shiffman / Shutterstock.com
  • Percentage increase in value of new residential units: +31.1%
  • Total increase in the value of new residential units: $42,197,000
  • Percentage increase in new residential dwellings: +47.0%
  • Total increase in new residential dwellings: +304

5. Baltimore-Columbia-Towson, MD

baltimore homes
GJS / Shutterstock.com
  • Percentage increase in value of new residential units: +32.6%
  • Total increase in the value of new residential units: $147,101,000
  • Percentage increase in new residential dwellings: +59.6%
  • Total increase in new residential dwellings: +1 181

4. Detroit-Warren-Dearborn, MI

House in suburban Detroit
James R. Martin / Shutterstock.com
  • Percentage increase in value of new residential units: +33.3%
  • Total increase in the value of new residential units: $244,210,000
  • Percentage increase in new residential dwellings: +1.4%
  • Total increase in new residential dwellings: +41

3. New York-Newark-Jersey City, NY-NJ-PA

Eileen_10 / Shutterstock.com
  • Percentage increase in value of new residential units: +33.6%
  • Total increase in the value of new residential units: $845,609,000
  • Percentage increase in new residential units: +30.3%
  • Total increase in new residential dwellings: +5,243

2. Riverside-San Bernardino-Ontario, California

California waterfront neighborhood
Matt Gush / Shutterstock.com
  • Percentage increase in value of new residential units: +34.3%
  • Total increase in the value of new residential units: $379,935,000
  • Percentage increase in new residential dwellings: +23.7%
  • Total increase in new residential dwellings: +1 104

1. Indianapolis-Carmel-Anderson, IN

Winter scene homes in Indianapolis, Indiana
Ted Alexander Somerville / Shutterstock.com
  • Percentage increase in value of new residential units: +34.3%
  • Total increase in the value of new residential units: $371,468,000
  • Percentage increase in new residential dwellings: +68.4%
  • Total increase in new residential dwellings: +2,449

Methodology

Man analyzing data on laptop
fizkes / Shutterstock.com

To determine the metros with the largest increases in home construction, Construction Coverage researchers analyzed the latest data from the US Census Bureau’s Building Permit Survey.

The researchers ranked metropolitan areas by the value of authorized residential housing permits from January to April 2022 compared to the same period in 2021. The total increase in the value of new residential housing, the percentage increase in new residential dwellings and the total increase in the number of new residential dwellings was also calculated.

Only metropolitan areas with at least 100,000 inhabitants and a monthly coverage percentage of at least 90% in January 2021 were included in the analysis.

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