Over the past year in the wake of the pandemic the construction industry has faced challenges the likes of which it has never seen before. Building permits give an indication of the industry’s progression by allowing us to know the overall amount of people starting the process of constructing a new home. Despite a brief downward trend last year, permits have increased overall annually. To see where in the US this increase has been most significant, we have used the latest US Census data to visualize the number of authorized building permits issued, by state, in 2020.
Total Building Permits Issued by State in 2020
Top 10 States With Most Building Permits in 2020
|State||Total Building Permits|
|4. North Carolina||80,474|
|9. South Carolina||42,340|
Similar to previous years, Texas is the state which issued the most permits with 230,503. Florida came in second with 164,074 permits issued, and California third with 106,075. The following 11 states all had over 30,000 permits pulled: North Carolina (80,474), Arizona (60,342), Georgia (55,827), Tennessee (49,719), Washington (43,881), South Carolina (42,340), and Colorado (40,469), New York (37,330), New Jersey (36,146), Virginia (33,813), and Utah (31,775).
There were 15 states which fall into the range of 15,000 and 29,999 building permits authorized. Those states were: Ohio (29,686), Minnesota (28,148), Pennsylvania (25,706), Indiana (24,919), and Wisconsin (21,226), Alabama (19,982), Missouri (19,839), Michigan (19,735), Nevada (19,716), Idaho (19,130), Oregon (18,665), Illinois (18,058), Maryland (17,982), Louisiana (17,283), and Massachusetts (17,025).
Continuing in descending order, there were 14 states which had over 5,000 building permits issued, including: Oklahoma (13,733), Iowa (12,623), Arkansas (12,493), and Kentucky (11,281).
The total number of permits pulled by the remaining 8 states, of which all had under 5,000, was 21,180. The lowest of them were Alaska (1,420) and Rhode Island (1,374).
Per Capita Construction Permits by State in 2020
Top 10 States with Most Building Permits per Capita in 2020
|State||Number of building permits per capita - 1,000 residents|
|1. District of Columbia||10.7|
|6. South Carolina||8.3|
|8. North Carolina||7.7|
|10. South Dakota||7.5|
It is worth noting how the data shows a different situation when we look at construction permits per capita. This puts the emphasis on how many permits were issued per 1,000 people in each state, as opposed to the total number where bigger populations tend to rank higher. Here we see the District of Columbia top the list with 10.7, followed by Idaho with 10.4, and Utah with 9.7. Notably, Texas, which tops the list of total permits issued, is 7th when it comes to permits issued per capita, with 7.9. Florida issued7.6 permits per 1,000 people, and California placed much lower on the list, coming in at 37th with 2.7 permits per capita.
What Permits Say About the Economy
Notable occurrences from the fallout of the pandemic are the soaring price of lumber, in part due to the lack of labor, sawmills and lumber yards having been closed for a period, and the high demand for homebuilding and remodeling. During the uncertainty in the industry last year the amount of building permits being issued initially went down, before recovering and increasing again.
Building permits reached their highest levels for 14 years in December 2020. This could be in part due to favourable mortgage rates and easy credits from banks for homeowners. As well as this, a housing shortage across the nation has resulted in an increased need for more homes to be built. The combination of these aspects has driven demand up, making it a prime time for people to build a home. The increase in permits reflects this, highlighting the appetite for new home construction.
Will Demand Continue to Increase?
What is yet to be seen is the resulting impact of some of the challenges facing the construction industry. The record breaking lumber prices are a burden which will need to be paid for, possibly affecting house prices. However, as Covid restrictions ease, and the vaccination rollout picks up pace, the general conditions for building homes will eventually stabilize.
There are other varying factors which may also contribute to the future of the housing market and construction industry. In light of the pandemic, there could potentially be an increase in demand for homes outside of cities, which may also be a way for homebuyers to cut back on costs. People are continuing to reassess their living conditions due to last year’s restrictions and, for whatever challenges homebuilders may face, it would seem that a lack of demand may not be one of them in 2021.