After a big increase in residential building permits in July, in August, permits for the construction of new housing units was down statewide compared to a year ago. Building permits were issued for a total of 2,260 new homes in Virginia this past month, a level of permitting activity that is 39% lower than last August. (Permits for new construction had been up by 34% in July.) The number of permits for new multifamily units was down 81% in August, while permits for single-family construction was 8% lower than a year ago.
The trend in new residential construction has been a movement away from the state’s larger urban areas to smaller suburban and rural areas. This pattern is similar to trends in home sales, where buyer activity has been strongest in smaller communities this summer.
Over the period January through August, there were 23,523 permits issued for new housing units in Virginia, which is down 1% from 2019. Year-to-date, more than a quarter of permits for new housing construction have been issued in communities outside of the state’s biggest metropolitan areas. Last year over this period, only 6% of all residential building permits were outside of these metro areas.
New residential construction activity has been down significantly compared to last year in both the Northern Virginia and Richmond regions. By contrast, areas outside of the Northern Virginia, Richmond, Hampton Roads, and Charlottesville metro areas have seen a more than 300% increase in new residential
building permits this year.
The shift in new home construction to places outside the state’s most urban areas reflects growing demand for homeownership by the Millennials, and particularly single-family homeownership, who have reached their prime homebuying ages. The suburban and rural trend could also be a result of the growing share of Virginians who have been working from home during the COVID-19 pandemic. Being able to work remotely allows some individuals and families to move further from their place of employment and into more suburban and rural communities across the state.