Current Construction Levels Show 'Lost' Building
Construction of new single-family homes, while currently experiencing growth, is still underperforming compared to historical norms, according to new analysis from Zillow.
In the 15 year span between 1985 and 2000, there were 3.9 single-family home building permits issued for every 1,000 residents, whereas there are 2.6 today, a decline of 33.5 percent, per Zillow. Looking at the data through the lens of population growth, new permits per capita are still below historic building norms, and are trending downward. In 28 out of the 35 largest U.S. metros, the downward trend holds with a deficit of new permits compared to historical normal levels.
If permits were issued at historic rates (defined on a per incremental capita basis) over the last 10 years, there would have been some 2.3 million more single-family homes built nationwide. That represents almost two years of ‘lost’ building at the current rate of 1.3 million per year. Although construction rates have been steadily rising – with June new home sales up 2.4 percent from a year ago – the U.S. is still building fewer single-family homes on a per capita basis than it did historically.
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