New residential construction has rebounded strongly in Virginia this summer. In July, a total of 4,380 permits were issued statewide for new housing units, which is up a significant 34% over July 2019. This is the largest number of building permits issued in a single month since January 2006. Multifamily construction led the rebound in Virginia, though single-family construction was also strong. The number of permits for new multifamily units was 44% higher than a year ago. Permits for single-family units increased by 28% compared to July 2019.
Between June and July, the number of permits issued for new residential units increased by 44%, with an 81% increase in the number of multifamily units permitted and an increase of 25% in the number of single-family permits.
Year-to-date, there has been a total of 21,158 permits issued for new housing units in Virginia, which is up 5% from 2019. Local communities across the Commonwealth are on pace to authorize the construction of 34,500 new housing units in 2020. However, despite the uptick in new housing construction activity this summer, the level of housing production in Virginia remains below what is needed to meet demand.
Typically, about 80% of new residential construction takes place in Virginia’s three major metropolitan areas: Northern Virginia, Richmond, and Hampton Roads. However, in the first seven months of 2020, only about two-thirds of new residential construction activity was permitted in the metropolitan areas and one-third of new units were permitted for areas outside of these more urban areas. This trend could indicate a growing preference for housing in smaller regions and rural areas in Virginia.
In Northern Virginia, a total of 5,402 permits for new housing units were issued in the first seven months of 2020. The number of residential permits totaled 4,973 in the Richmond region and 4,114 in the Hampton Roads region. In the remainder of the state, there were 6,669 new housing units authorized by building permits in the January through July 2020 period.
The steady residential building permit activity in Virginia reflects improvement in the overall economy, as well as an increase in builder confidence and a favorable financing environment. While housing inventory levels in Virginia continue to decline, an increase in new listings in July and improvement in new construction activity will help bring more choices to would-be homebuyers in Virginia this fall.