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New construction activity is slowing down, but a new study identifies 10 U.S. cities as new construction boomtowns, based on residential permit data.
According to National Association of Home Builders chief economist Robert Dietz, "Markets that add inventory keep housing affordable and in turn attract more businesses and startups in those areas," even though new homes are about 26 percent more expensive than existing homes. In Realtor.com's ranking, both East and West Coasts are represented, as are Southeast and Southwest regions. Dallas took the number one spot with a 2.8 percent increase in residential permits issued to 63,421, and a median list price of $335,700.
The country is already at its lowest point in a decade for housing affordability, due largely to the shortage of homes on the market. In February this year, according to U.S. Census Bureau data, 9.9 percent fewer homes than a year ago had been started but not yet completed. The lack of newly constructed homes is only exacerbating the crisis.
"Adding new homes is key to a city's economic health," says Dietz. Much of the new construction he's seeing is in the South and Southwest, where land and construction labor is cheaper and there are fewer costly and time-consuming building regulations. (New York City and Los Angeles, our outliers, made the list simply because they're so darn big.)
