The Top U.S. Cities for New Home Construction – Houston #1

While construction activity came to a near-halt after the housing bubble burst, things are finally looking up, according to a recent report in Atlantic Cities.

As with all real estate, construction is also local, however. While construction is gearing up in some markets, it remains dormant in others. According to Atlantic Cities, understanding construction patterns is critical for understanding the future of cities, for two reasons.

First, construction activity is a bet on future growth, as developers will only build in areas where they believe future demand for housing is strong. Construction is a clear signal of builder confidence in an area. Second, construction has a long-term impact on urban patterns, affecting a city’s density and sprawl.

What do construction patterns say about the future of cities in America? Atlantic Cities cites recent Census Bureau data on construction permits issued by localities in 2011, including whether those permits were for single-family homes or units in multi-family buildings.

The metro areas with the most construction permits were:

• Houston, Texas – 31,271
• Dallas, Texas – 18,686
• Washington, DC – 18,686
• New York, N.Y. – 13,973
• Austin, Texas – 10,239
• Los Angeles, Calif. – 9,895
• Phoenix, Ariz. – 9,081
• Seattle, Wash. – 8,664
• Atlanta, Ga. – 8,634
• San Antonio, Texas – 7,127

More permits were issued in the Houston metro area than in any other metro, by far. Four of the top ten metros were in Texas. But this list is dominated by large metro areas, and bigger areas are expected to have more construction activity. Among the cities with the most amount of construction permits per 1,000 homes are: El Paso, Texas; Austin, Texas; Raleigh, N.C.; Houston, Texas; Charleston, S.C.; Dallas, Texas; Little Rock, Ark.; and Baton Rouge, La.

The rate of construction is highest in metros within Texas and the Carolinas and lowest in the Northeast and Midwest. The rate of construction is higher across Texas, the mid-South and Mountain states, but lower in New England, the Great Lakes, South Florida and most of coastal California.

Source: The Atlantic Cities – the atlanticcities.com

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