Three Texas Metros lead in 2020 permits, as South dominates with 9 of top 10 markets
By Manuel Gutierrez, NKBA Consulting Economist
There are an impressive 385 metropolitan areas in the U.S. that widely differ in the amount of annual housing permits issued. Generally, permit totals correlate closely with metropolitan area size. For instance, Houston had 63,672 permits issued in 2019, highest in the nation, while Danville Illinois had a total of 12.
By way of definition, metro areas are defined geographically as one or more counties that contain a city of at least 50,000 inhabitants, or have a joint urban population of at least 100,000 people.
Year-to-date through August, 300 of the 385 metro areas have issued at least one housing permit in each of the last 10 years, and 241 (80%), have issued at least 100. On a cumulative basis, the top ten metropolitan areas generated over a third (36%) of all housing permits issued through August. The top fifty accounted for nearly three-quarters (74%) of them.
The chart below displays the concentration in the number of housing permits among all metro areas. For instance, 89% of the housing permits issued so far this year were in the top 100 metro areas.
The Houston Metro area leads the nation with the largest number of permits issued so far this year, over forty-four thousand through August. Over the last decade, this metro has been either first or second nationally. For 2020, Houston leads in both single and multifamily permits issued, although in prior years other metro areas, including nearby Dallas-Ft. Worth,had issued more multifamily permits.
The chart below displays year-to-date permits issued in each of the top ten metro areas. The percentages shown at the bottom of each chart reflect the change from August of last year.
Note that the three largest metro areas are all in Texas, which jointly generated nearly one in five (18%) of the housing permits issued across the nation. Additionally, nine of the top ten are in the South, with only Seattle, ranked #9, outside that region.
About a quarter of the housing permits issued in metropolitan areas are for multifamily units, but the proportion ranges widely by market. Even among the top ten areas, multifamily units range from a low of just 13% in Atlanta, where a vast majority of new houses are single family, to a high of 69% in Miami, which has a prevalence of multifamily housing units, typically sold as condominiums.
The chart below displays the single and multifamily mix for these top ten metros. The dashed red line reflects the national average split between single and multifamily, with orange representing each market’s multifamily portion.
The South leads the nation with the largest average number of permits issued by metro. Year-to-date through August, that average (mean) stood at 3,215, well above any other region, and more than 50% higher than the next highest region, the West, which had an average of 2,093 permits issued.
