Huge contrast between single-family (+10%) and multifamily (-13%).

By Manuel Gutierrez, Consulting Economist to NKBA
Year-to-date through October, states have combined to issue 1.18 million housing permits — 1% more than the same period last year. However, the difference between single-family and multifamily housing is substantial — a 23 point swing.

Permits for single-family houses are up 10% compared to last year, with a total of 805,000 issued so far. In contrast, 13% fewer permits for multifamily housing units have been issued. The pandemic has had a clear impact on the type of housing built, as many individuals have shown a clear preference for single-family houses in suburban areas, or, if they do choose multifamily homes, they are in less populated areas.

Additionally, housing patterns differ by state, as illustrated in the map below. The 10 states shaded dark green jointly have issued 709,000 new housing permits year-to-date, up 5% over the same period last year. Combined, they account for 59% of all the permits issued through October.

However, one of the top three states, California, has actually issued 6% fewer permits, while both Texas and Florida, the leaders, have generated more permits.

In fact, three of the top 10 states have issued fewer housing permits in 2020. Besides  California, Georgia is down 3% from last year and Washington has a more sizable 9% decline.

When viewing detail for single- or multifamily housing, a different picture emerges. Only one of the top 10 single-family markets has issued fewer permits this year, the state of Washington. However, six of the top 10 multifamily states have issued fewer permits this year.

Fig. 1 displays the top 10 single-family housing markets. Most of them fall within the top states, with the exception of the Washington DC area, which covers several states (Virginia, Maryland, West Virginia and the District itself), none of which is very large on its own.

Geographic concentration is apparent, with three of the top metros areas in Texas (Houston, Dallas and Austin) and two others in Florida (Tampa and Orlando.)

In contrast to single-family construction, there is even greater concentration in multifamily housing among the nation’s metro areas. While the top 10 metropolitan areas account for 26% of the single-family housing permits, they account for 40% of the multifamily housing permits issued, with the New York metro area dominating. Still, as illustrated in Fig. 2, five of the largest metro areas (New York, Houston, Dallas, Seattle and Minneapolis) have issued fewer multifamily permits this year.