Potential homebuyers are facing a nationwide shortage of houses on the market, but a new report shows Springfield is outpacing the U.S. average for seeding new construction.
Not only is the region beating out national averages, but Springfield appears to be ballooning at a faster rate than metropolitan areas of a similar size — at least when it comes to handing out building permits.
That's according to a new report by researchers at Inspection Support Network, which combined Zillow data with U.S. Census Bureau data on housing unit permits for its analysis.
For every 1,000 existing homes in the Springfield metro area in 2021, there were 12.8 new housing units authorized to build. That's higher than the national average of 12.5. It's also a significant leap from Springfield's building pace in 2019, when the region was greenlighting 8 new units for every 1,000 homes.
That represents a 63-percent growth rate in housing authorizations from 2019 to 2021. For context, the national average is 25 percent for that same period. Out of 97 mid-size metropolitan areas included in the report, Springfield ranked 12th in percentage growth.
Building could help address major factor in difficult housing market
This spike in building permits is a good sign, according to the report's researchers.
“Since the beginning of 2022, the U.S. Federal Reserve has raised interest rates in efforts to combat inflation throughout the economy,” the report reads. “Between rising mortgage rates and the rapid run-up in home values, the residential real estate market has shown recent signs of cooling. But while a leveling out in demand could slow the pace of price increases, these measures cannot solve another fundamental challenge in the U.S. housing market: a major shortage of housing supply.”
The shortage of homes on the market has been fueled, in part, by a decline in single-family home construction.
In Springfield, permit authorizations continue to climb year over year. More recent data, reviewed independently by the Daily Citizen, shows a 43 percent growth from May 2021 to May 2022.
While authorizing building at a quick clip is a step toward easing the shortage, lack of workforce and supply chain issues continue to slow progress, according to Inspection Support Network.
“COVID-related disruptions have produced worker shortages and hindered supply chains, making it harder and more expensive to obtain building materials,” the report reads. “As a result, more single-family units are seeing monthslong delays in the time it takes to start and complete construction when compared to years past.”
