With only 2.1% of the U.S. population, Arizona was responsible for 3.4% of the nation’s single-family residential building permits issued in 2017. The Grand Canyon State is once again punching above its weight in new home construction.

Statewide last year, 28,072 single-family residential building permits were issued by municipalities. There were 819,976 of the same category of permits issued nationally.

In the U.S. Census Bureau Annual Building Permit Survey released May 1, 2018, Arizona ranked 7th behind Texas, California, North Carolina and Georgia. Notably, it ranked ahead of states with larger populations like New York, Ohio and Michigan in the race for permits.

That’s an encouraging sign for Phoenix home builders. The Valley’s residential construction volume collapsed by more than two-thirds following the Great Recession in 2007 and subsequent housing bubble blowout.

Now, a shortage of single-family housing inventory under $300K has plagued the Phoenix metro for more than two years. Builders are challenged by tight labor availability, limited land, skyrocketing lumber prices and rising construction wages. New home construction firms can’t be profitable in lower price ranges, so they aren’t building affordable entry-level homes. These labor and materials factors exacerbate the challenge to get builders back to balanced levels.

At the peak, there were 60,000 new homes built in the Phoenix metro in 2006.

On a city level, the Phoenix-Mesa-Scottsdale CBSA (Core Based Statistical Area) chalked up 20,471 single-family building permits according to U.S. Census data. The Phoenix metro ranked 4th among 406 metros in the same study in volume. Only Dallas, Atlanta and Houston ranked higher for single-family permits.

For this analysis, July 2017 estimates for both Arizona and national populations were taken from the U.S. Census Bureau’s chart below:

 


I think it’s good that I had some experience of the real world before I became successful. You know, having to get up in the morning and going to work in construction. – Tom Jones, Welsh musician whose singing career has spanned six decades