Jul 25, 2023 - Real Estate

Homebuilding surges in Atlanta

Data: U.S. Census; Note: Unadjusted estimate of privately owned units of any size; Chart: Axios Visuals

Here's some news that won't come as a shock to anyone: Atlanta is experiencing a spike in new residential construction.

Driving the news: ​​74 new homebuilding permits per 100,000 residents were issued in Atlanta in May 2023, up considerably from 32.7 in May 2020 — the early months of the COVID-19 pandemic.

  • Of the 4,461 total permits, 2,391 were issued for single-family homes, 54 for buildings with 2-4 units, and 2,016 for those with five or more units.
  • That's according to a new analysis of U.S. Census Bureau data from Axios' Kavya Beheraj and Alex Fitzpatrick.

The big picture: Nationwide, 42.3 new homebuilding permits per 100,000 residents were issued in May 2023, up from 32.9 in May 2020.

  • In May 2023, 139,600 total permits were issued across the U.S. the majority of which (88,900) were for single-family homes.
  • Nearly 46,000 were issued for buildings with five or more units, and nearly 5,000 for those with between two and four units.

Why it matters: A post-pandemic nationwide housing shortage is keeping prices high.

  • Recent estimates from Freddie Mac indicate the U.S. is short about 3.8 million units of housing, either for rent or purchase, Axios' Emily Peck reports.
  • A bump in new home construction could bring prices down — it's basic supply and demand.

Zoom in: Some cities are seeing an especially significant explosion in new home construction as a post-pandemic reality takes hold.

  • In Raleigh, for example, 138 new permits per 100,000 residents were issued in May 2023, up from 71.7 in May 2020.

State of play: While many newly built homes have been targeted at (and thus priced for) relatively wealthier buyers, homebuilders are starting to focus on more affordable projects for first-time homebuyers, Axios' Matt Phillips reports.

What they're saying: "It's a renewed focus, given the lack of inventory," Robert Dietz, chief economist at the National Association of Home Builders, told Axios.

  • "First-time buyers are going to play a key role in the order expansion for homebuilders going forward," Deitz said.

Go deeper: "Golden handcuffs" pinch metro Atlanta's housing market

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