The residential construction sector is showing signs of improvement in Virginia. While nationally, building permits for new housing construction were down in May, in Virginia, the number of residential building permits issued by local jurisdictions across the state were up 23% between April and May, and were 17% higher compared to May of last year. The overall number of building permits authorized for new housing units was down by about one percent year-to-date.
The uptick in Virginia was driven by a surge in permits for new multifamily residential construction (i.e. housing units in buildings with 5 or more units). In May, the number of permits issued for multifamily units was more than double the number last May. Despite this surge, year-to-date, permits for multifamily units are down 10% compared to last year.
Single-family permits in May were 17% lower than last May, though permits for new single-family homes are up 3% year-to-date.
In the Washington DC and Richmond metro area markets, the number of permits for new residential construction remain lower in 2020 than in 2019. In the Washington DC region (which includes counties and cities in Northern Virginia and Suburban Maryland, along with the District of Columbia), there have been a total of 9,327 building permits issued year-to-date, which is down 17% compared to a year ago. Permits for both new single-family homes and multifamily units were down in the region.
In the Richmond metro area, there were 3,340 residential building permits issued, down 9% from a year ago. The decline reflects a lower number of permits for multifamily units; there was an increase in the number of single-family housing units issued in the Richmond area.
The number of residential building permits was up in the Virginia Beach-Newport News, Charlottesville, Harrisonburg, and Staunton metro areas.
The increase in building permits is a positive sign, reflecting increasing builder confidence and an overall improvement in the economy. However, the level of new construction remains far below what is needed to meet demand in most markets across the Virginia. As a result, inventories of homes for sale will remain low as we head into the summer market.