American Cities Spending Billions to Build More Homes

Many parts of the United States face serious housing shortages. One study last year by the nonprofit research group Up For Growth estimated that the country needs about 3.8 million homes simply to meet current residential housing demand. This shortage has caused home prices and rents to skyrocket as supply outpaces demand.

Prospective home buyers and renters suffer from this shortage, but the shortage is good for homeowners who see their home equity increase and landlords who are able to raise rents. This is one of the reasons – along with keeping traffic and density low – why homeowners and city councils often oppose the construction of multi-family units that would help to reduce and stabilize housing costs. For example, intense opposition by homeowners in White Plains, New York, last year compelled the city’s council to reject a proposal to replace an office building with a 360-unit apartment complex. (Of course, the situation can be starkly different in other places, here are America’s 25 ghost towns.)

New residential buildings include the construction of both single-family and multi-family homes, the latter of which includes apartment buildings and condominiums. The construction of larger single-family homes – which houses fewer people on more square footage – is much higher than the construction of multi-family units, which are vital in more densely-populated areas suffering from housing shortages and unaffordability. So where have contractors been busiest with new residential construction?

To determine the metro areas with the most new housing construction, 24/7 Wall St. reviewed data on building permits by year from the U.S. Census Bureau’s Building Permits Survey. Metropolitan areas were ranked based on the total value of new privately-owned housing units authorized by building permits in 2022. Supplemental data on the number of new residential building permits authorized used to calculate the average value of permits in each metropolitan area and historical data used to calculate annual change also came from the BPS. 

New residential construction in 2022 occurred mostly in metropolitan areas in three of the nation’s largest states – Florida, Texas, and California – with Texas leading in the total value of authorized residential units. Twelve of the 25 metro areas with the newest housing construction last year are located in these three states. (Find out how much home you can buy for $200k in each state.)

Developers in the Texas metropolitan areas of Dallas, Austin, Houston, and San Antonio were issued a total of more than 220,000 residential permits in 2022 for a total worth of nearly $44 billion. Despite a large influx of new residents and tremendous demand for homes in the Austin metropolitan area, permits declined by 16% compared to 2021. The total number of permits declined from 2021 in several metros on the list, including a nearly 42% drop in Nashville.

The average value of a new residential unit in these 25 metro areas ranges from about $168,000 in the New York-Newark-New Jersey metro area to about $280,000 in Miami-Fort Lauderdale-Pompano Beach.

Here is where the most U.S. new residential construction is happening.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.

Source: Read Full Article