Philadelphia homebuilding lags most major U.S. metros
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Philadelphia ranks near the bottom when it comes to building new single-family homes, per the latest analysis by real estate company Redfin.
What they found: Philly had 3.7 single-family building permits per 10,000 people in the first quarter of this year, which ranked 37th per capita among major U.S. metros.
- The relative lack of homebuilding is happening in places homebuyers are leaving, per Redfin.
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.
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.
Between the lines: There is some hope for a potential wave of residential apartment units in Philly after developers rushed to apply for construction permits late last year ahead of an expiring tax incentive.
- At the end of 2021, more than 2,600 permits were issued, compared to the approximately 1,600 that are typically approved.
- Still, it's unclear if all of those apartment units will be built soon, since developers could've applied for permits preemptively.
The bottom line: Ramping up new home construction will help move the market toward balance, if only a little.