New construction is booming in Raleigh

New construction is booming in Raleigh

Raleigh takes silver when it comes to building new homes, per the latest analysis by real estate company Redfin.

What they found: Raleigh had 30.7 single-family building permits per 10,000 people in the first quarter of this year, the second-most per capita among major U.S. metros.

Data: Redfin; Table: Thomas Oide/Axios
Data: Redfin; Table: Thomas Oide/Axios

Why it matters: As the number of homes for sale remains near all-time lows and monthly mortgage payments are near their record high, building more homes is one way to ease the affordability crisis.

  • The homes are especially needed in the booming Triangle region, which was the second fastest-growing large metropolitan area in the U.S. last decade.
  • A lot of the housing construction is happening in Raleigh’s surging suburbs, where land is cheaper. Wake County towns like Apex, Wendell and Zebulon saw big growth during the pandemic, Axios Raleigh reported.

Zoom out: Single-family and multifamily building permits are up from pre-pandemic in most U.S. metros, Redfin found.

  • Of note: Redfin defines “single-family” as buildings with one to four housing units and “multifamily” as buildings with five or more housing units.

Yes, but: “There still aren’t enough homes to meet the pace of household creation, and we need to be more prepared when demand inevitably picks back up,” said Redfin chief economist Daryl Fairweather.

What’s next: The momentum in building might be slowing, however. New home construction dropped 14.4% in May compared to April according to data released last week.

  • The slide was more than economists had expected, as interest rates have soared over the past few months, making home buying more expensive, Reuters reported.

The bottom line: Ramping up new home construction will help move the market toward balance, if only a little. However, rising interest rates could slow down construction.

https://www.axios.com/local/raleigh/2022/06/22/raleigh-is-second-in-homebuilding-as-housing-costs-skyrocket

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