Annual Building Permit Trends for Multifamily Housing Units
June 24, 2024
The latest annual building permits data indicates fewer multifamily units are in the pipeline in Virginia’s housing market. In 2022, multifamily residential building permits in Virginia were at their highest level since 2000. However, following the boom in multifamily housing activity in 2021 and 2022 due to a rise in demand for rental units, there has been a slowdown in the sector. Similar to data at the national level, multifamily housing permits in Virginia went down in 2023 compared to the year before.
Furthermore, most metro areas in Virginia saw a decrease in the number of permits for new multifamily housing construction in 2023 compared to the prior year. The number of permits issued was down 48% in the Washington D.C. metro area at 12,419 permits, and down 11% in the Richmond metro area at 5,151 permits. Historically, these two metro areas have had the highest multifamily housing activity in Virginia. Lynchburg and Roanoke metro areas also saw a significant decline in multifamily housing permit activity in 2023. On the other hand, the number of multifamily housing permits saw an annual increase in Hampton Roads.
It is worth noting that the decline in multifamily housing permits is part of a larger trend of lower housing permits throughout various housing structure types. The slowdown in multifamily housing permits will have potential consequences on rental prices in the local markets along with its possible spillover effects on the single-family housing market in Virginia.
For more information on housing, demographic and economic trends in Virginia, be sure to check out Virginia REALTORS® other Economic Insights blogs and our Data page.
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