Sep 6, 2023 - Real Estate

New Orleans homebuilding permits drop despite national increase

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

Just more than 23 new homebuilding permits per 100,000 residents were issued in New Orleans in May 2023, down from 25.2 in May 2020 — the early months of the COVID-19 pandemic.

  • Of the 296 total permits, 206 were issued for single-family homes, 43 for buildings with two to four units and 47 for those with five or more units.
  • That's per a new analysis of Census Bureau data.

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.

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, however, could bring prices down — it's basic supply and demand.

By the numbers: 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.

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, per Axios' Matt Phillips.

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 Matt.

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

Yes, but: "There's little sign of a Levittown-style surge of modest-home construction to magically solve the inventory problem any time soon," Phillips writes.

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