Home construction across the United States is slowing down—and the timing couldn’t be worse.


The country is already at its lowest point in a decade for housing affordability, due largely to the shortage of homes on the market. In February this year, according to U.S. Census Bureau data, 9.9% fewer homes than a year ago had been started but not yet completed. The lack of newly constructed homes is only exacerbating the crisis.
But hold on! There are still a number of markets in the country where foundations are being poured, frames are being erected, and contractors are contracting, everywhere you look. These tend to be high-demand metropolitan areas* with plentiful gigs, lots of amenities, and ample room to grow.

Adding new homes is key to a city’s economic health,” says Robert Dietz, chief economist of the National Association of Home Builders. Much of the new construction he’s seeing is in the South and Southwest, where land and construction labor is cheaper and there are fewer costly and time-consuming building regulations. (New York City and Los Angeles, our outliers, made the list simply because they’re so darn big.)


Despite the fact that new homes tend to be more expensive than existing ones—about 26% pricier, thanks to high labor, materials and land costs—they help to keep runaway home prices at least somewhat in check by providing buyers with more options. It’s the housing circle of life: “Markets that add inventory keep housing affordable and in turn attract more businesses and startups in those areas,” says Dietz.
To come up with our findings, we analyzed census data to figure out where builders scored the most residential construction permits. The permits are for single-family homes, condos and co-ops, apartments, townhouses, and duplexes. They’re not an iron-clad guarantee that new housing will be completed an average of seven months later. But they’re the best indication that it will.
So where is building booming?

Cities building the most new homesTony Frenzel

1. Dallas, TX


Median list price: $335,700Number of permits: 63,421One-year change in permits: 2.8%

Dallas, TX, constructionfelixmizioznikov/iStock

2. Houston, TX


Median list price: $310,100Number of permits: 57,021One-year change in permits: 33.6%

Home construction in Houston, TXSpencer Grant/Getty Images

The devastation of Hurricane Harvey, which barreled into the city in August 2017, is one reason permits are up. Many residences had to be razed and rebuilt, while some folks opted to build new homes in less flood-prone areas.


And new homes these days are smaller and at a lower price point. Why? Because of lots of first-time buyers and folks downsizing.
“Millennials are getting to the stage in life where they are buying homes,” says Lawrence Dean, a Houston regional director at Metrostudy, a property research firm. “And there are more empty nesters who are downsizing because they need less space.”
One of the hottest spots to snag a new home is in Sienna Plantation, TX, a master-planned suburban community 40 minutes south of downtown Houston. Homes here range from entry-level, three-bed, two-baths priced around $300,000 to luxury abodes starting at over $600,000.

3. New York, NY


Median list price: $525,100Number of permits: 48,384One-year change in permits: -3%

Hudson Yards construction in New York, NYkrblokhin/iStock

4. Atlanta, GA


Median list price: $313,300Number of permits: 39,132One-year change in permits: 19%

5. Phoenix, AZ


Median list price: $337,500Number of permits: 31,343One-year change in permits: 5.7%

6. Los Angeles, CA


Median list price: $714,500Number of permits: 29,621One-year change in permits: -5.1%

7. Austin, TX


Median list price: $349,800Number of permits: 29,716One-year change in permits: 15.1%

8. Orlando, FL


Median list price: $299,400Number of permits: 28,877One-year change in permits: 48.6%

Orlando, FL, homesfotoVoyager/iStock

More permits were issued to builders in the Orlando market last year than in any year in a decade. That’s because builders are trying to keep up with the demand in the outer suburbs, places like Lake Nona and St. Cloud.


Orlando had the fifth-highest uptick in new residents, according to realtor.com’s December analysis. These are typically professionals and retirees fleeing the cold and high prices of the Northeast and those leaving hurricane-devastated Puerto Rico.
These newcomers are buying up new three- and four-bedroom, single-family homes in subdivisions with fitness centers and pools in communities like Lake Nona.

9. Seattle, WA


Median list price: $592,000Number of permits: 27,950One-year change in permits: 2.1%

10. Washington, DC


Median list price: $425,000Number of permits: 25,429One-year change in permits: -3.8%

Lance Lambert is a data journalist for realtor.com. He previously wrote for Bloomberg Businessweek and the Chronicle of Higher Education. Follow @NewsLambert

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