HBAM: New home construction continues positive trend

HBAM: New home construction continues positive trend
<strong>Photo by iStock</strong>

Housing permits for single-family homes in Michigan increased again in September despite the economic downturn, according to the Home Builders Association of Michigan.

A total of 1,588 permits for new single-family housing were issued in September 2020 compared to 1,538 in September 2019. A total of 10,537 single-family home permits have been issued across Michigan, from January through September this year.

“It is very encouraging that despite the economic shutdown earlier this year, our numbers continue to rise back toward 2019 levels,” said Bob Filka, Home Builders Association of Michigan CEO. “There is strong, pent-up demand for new housing and remodeling services in our state. Our members are extremely busy. In addition to pent-up demand, low interest rates have helped our industry recover more quickly than we anticipated.”

In 2019, new home construction contributed a total of $4.25 billion to the state’s economy, contributing $836.4 million in taxes and other revenue for state and local governments and 54,372 jobs.

“The renovation market is roughly double these amounts,” Filka said, “and that has been driven by the lack of new housing being built in moderate price ranges. This has put tremendous pressure on our existing housing stock. Bidding wars for existing homes in moderate price ranges are being seen in markets all across the state. In normal or prior times, these trends would push more new home construction activity. But with limited production capacity, too few workers and rising building costs, we’ve not seeing that correlation now.”

To address the growing housing crisis Michigan faces, the Home Builders Association of Michigan — along with numerous community, economic development and nonprofit housing organizations — called for a bi-partisan policy initiative earlier this summer, as the Business Journal previously reported.

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