moveBuddha examines the U.S. house-building boom and its effects on record-high home costs.
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Home costs are at record highs, with mortgages costing double what they did in 2020. Building new housing could help minimize the price crunch that's ballooned median home prices to $419,300 and make housing accessible to more Americans. Where is it already happening?
It's a simple case of supply versus demand: if you want affordable home prices, you want more housing supply. With added competition, buyers win.
To discover which US cities are doing the best to build new homes, moveBuddha analyzed America's 6,345,985 construction permits for metros since 2020, by raw numbers and per capita, with a closer look at single and multi-family home data.
Here's what the analysis found:
The US housing supply is low, with a current shortage of 4.5 million homes. That leads to higher prices in a market that's already seen the average home price soar compared to incomes — 78% of the US's large metro markets are experiencing their highest-ever ratios and, in 27 counties, an average home sets you back more than eight years of salary.
Compare that to 1980, when there were no US counties where housing ate up such a large portion of the average American's income.
But while construction firms could take advantage of the demand and build more homes, they're not.
Why?
There are two primary obstacles. High interest rates aren't just suppressing buyers; they're weighing on developers looking to buy land. Add inflationary costs of materials from ongoing supply chain disruptions, and the development cost may be greater than the payoff.
It takes a certain type of location to juggle those costs and stay ahead of in-moves, too.
moveBuddha found that just four cities today have applied for over 100K permits for building single-family homes since 2020: Houston, Dallas, Phoenix and Atlanta.
Total permitted single-family homes
Houston, TX 219,718
Dallas, TX 200,456
Phoenix, AZ 128,566
Atlanta, GA 120,303
As these cities absorb more than their share of new residents, they'll need to actualize affordable land and construction costs while staying ahead of a migration wave for the ultimate housing goal: more supply.
Since 2020, 3,872,851 single-family homes have been permitted.
These permits tend to indicate where people are moving most, since boomtowns must work to house new residents.
By volume, that means permits are highest in Southern cities as new residents pour into cheaper, sunnier climates. Popular enclaves like Houston, Charlotte, NC, Atlanta, Nashville and Tampa, FL, make a big splash by adding large numbers of homes.
By volume, growing southern and Sunbelt cities are taking the prize for new single-family homes. Houston is the nation's winner, with its 219,718 single-family permits outbuilding every other city on the top ten list.
That aligns with moveBuddha's data, which shows that the most popular move destinations are located in large sun-soaked cities with below-average home prices, including Houston suburb Katy, TX. Homes in the metro area cost $310,707, well below the latest median home price high of $419k.
Houston is so popular that permits issued from 2020 to 2024 won't cover the population the city added in those years, which is estimated to be about 400,000 new residents.
From July 2022 to July 2023 alone, Houston gained 140,000 new residents, which means that despite the building boom, home prices may be destined to keep rising.
The takeaway? Future Houstonians should hurry.
On a per capita basis, Salisbury, MD, rates #1 in the country for new single-family building permits.
Unlike Houston, the accelerated building pace is more than enough to accommodate new residents on Maryland's Eastern Shore. From 2020 to 2023, Salisbury gained just 118 new residents. By issuing 138.4 single-family home permits per thousand residents, Salisbury has enough new housing for 4,573 new families.
Why so many new permits? It might be the city's permit-fee moratorium, a plan to address housing affordability for its existing residents.
On the other hand, #2 Myrtle Beach and #3 The Villages, each with the highest number of in-moves compared to residents moving out in 2024, are creating housing for their steady stream of newcomers.
The Villages hasn't kept pace with population increases across the same period. It built roughly 17,000 homes for ~22,000 newcomers. However, Myrtle Beach has built ~49,000 residences for ~46,000 new residents.
These top three cities can keep prices low only when building outpaces new in-moves. They're doing a better job of keeping demand in line with supply, but for some, there's tension to keep up the pace.
Don't want to wait until prices are affordable?
Here are the permit-winning cities with plenty of homes and median prices under $350K right now.
Huntington, WV, where housing supply outstrips demand. Huntington added 1,081 single-family homes since 2020, but lost 1,516 residents from 2020 to 2023. You'll also find affordable midwestern cities like Chicago, Indianapolis, Columbus, Kansas City, Detroit and Des Moines dominating the list.
Houston and Myrtle are popular for a reason. You don't have to move to an unpopular city to score a deal. Among the state winners by volume, some of the lowest home prices are in popular destination cities like Houston and Myrtle Beach.
Per capita, the cheapest permit winners include Hinesville, GA ($241K), Burlington, NC ($289K) and Fayetteville, AR ($338K).
You may need to move fast. Building permits are a sign that a city is working to create more housing supply, not a sign they're succeeding. Hinesville, GA, for instance, has added 7,375 new residents from 2020 to 2023 but issued just 3,453 new housing permits from 2020 to 2024. If those permits skew toward single-family homes or simply fail to keep pace with new moves, prices will continue to rise.
Multi-family housing is growing in expensive cities and their up-and-coming counterparts.
Cities like New York, Seattle and Napa, CA, benefit by creating space for workers, as housing prices have already locked many out of the market.
But these cities aren't so far removed from newly cool urban hubs that want to attract young graduates even as home prices creep further out of reach. These are cities like Nashville, Austin, Phoenix and Raleigh, NC.
By volume, large cities are still creating most of the country's multifamily housing, regardless of whether they're losing or gaining population.
While it's one of the country's biggest population losers, New York is building more multi-family units than anywhere else. At almost double the rate of #2 Dallas, New York's multi-family builds are typical for a city where just over 75% of its housing is multi-family units.
New York's multi-family units are practical in a historical city scattered across islands. Residential neighborhoods are long established, and there's little space to build more homes.
Per capita, Austin-Round Rock-Georgetown, TX, is building more multi-family housing than anywhere else. Fueled by suburban tech growth during a COVID-19 shake-up, Austin now attracts plenty of college grads looking to work at giants like Google and Apple, but can't afford its in-demand single-family homes and want to walk to the office.
Multifamily home growth in Austin has spurred discussion of oversupply and dipping rental prices, so the boom keeps Austin affordable to would-be movers.
Taking pressure off the housing race is one of the goals of increasing housing supply. But as more Americans move to Southern and Sunbelt cities, construction companies can't put up houses as fast as new residents want to move into them.
Ultimately, permits aren't always a sign of affordable housing. They're a good start, but they only support city residents when out-moves and housing permits are equalized, or even better, when new housing outpaces new residents.
As always, hidden gems rarely stay hidden for long. As word gets out, affordable cities attract a crowd, and prices inevitably start to climb. So, if you're on the hunt for a place that's still under the radar, you'll need to act quickly, particularly in the popular Sunbelt states. Find where permitting is strong, but prices are still affordable, and you might just score an affordable home that becomes tomorrow's hot property.
To uncover which metros are building the most housing, moveBuddha looked at data from the US Census Bureau, Department of Housing and Urban Development (HUD) for 2020, 2021, 2022, 2023, and through April 2024 year to date.
This included both volume and per capita measures to more closely uncover trends across the nation:
Zillow housing data is used for median home value data.
This story was produced by moveBuddha and reviewed and distributed by Stacker Media.
