Supply has played a huge role in affordability issues for buyers, with the U.S. short 4.5 million units and sellers still holding on to homes with lower rates. Building permits have become an important indicator of housing demand and what construction activity will be like in the future. Let’s look at the most recent permit data for Virginia and how it compares across different states and metro areas.

The U.S. has been underbuilding homes over the last 15 years, with the pandemic exacerbating the issue as construction stalled and home buyers demanded more space. Since then, construction has improved with the National Association of Home Builders Geography Index (NAHBGI) reporting that five out of seven regions have seen double digit gains in single family permits in the second quarter. Across the country, single family permits were also up 2.8% from July 2024 per the Census Bureau. At the state level, Texas and Florida, two of the most populated states in the country, took the lead in authorizations issued year to date (January 2024 to August 2024) combining for nearly 200,000 single family permits. Smaller states such as Rhode Island and West Virginia issued a lower number of permits within this same period.

In comparison, Virginia ranks as the 9th state with the largest number of single family permits year-to-date. There were 15,970 single family permits authorized between January and August of this year, 11.7% higher than the year before. The state has also seen single family permits exceed where they were five years ago, going up 9.9% in August 2024 compared to August 2019.

Most local markets in Virginia saw the number of single-family permits increase in the month of August compared to the same time last year. Smaller metro areas such as Harrisonburg saw the biggest jump in single family permits with 435 permits authorized, 46% higher than the previous year. Hampton Roads and Northern Virginia, which saw negative permit growth in August 2023, saw small increases in single family permits in August 2024. The only local market where single-family permits went down this month was Blacksburg with 316 total building permits (-5.0%).

Supply will remain an ongoing issue but there are signs of improvement as interest rates have started to come down. This is a positive sign for buyers who have been waiting to enter the market and builders looking to meet that demand with additional housing.

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.