To a first approximation, every housing unit that gets built in the US is required to have a building permit - a document from the government granting

60 Years of Homebuilding

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2021-07-21 16:30:07

To a first approximation, every housing unit that gets built in the US is required to have a building permit - a document from the government granting permission to build it. The number of homes built is considered an important economic indicator, and the government closely tracks housing permits as a way to measure it. We have month-by-month housing permitting data for individual counties going back to 1980, and state-level permitting data going back to 1960. Permits issued don't precisely track homes actually constructed, but it’s a very close match. Using this permit data, we can construct a very granular picture of exactly how home construction has proceeded in the US for the past 60 years.

Permitting data can be pulled from a few different sources. For national level data I’ll use FRED housing statistics, for state-level data I’ll use the Census Building Permits Survey, and for county and metro-level data I’ll use HUD’s SOCDS Permits Database.

We’ll start with the 10,000 foot view. In 2020 there were 1.47 million housing units permitted in the US, 1 million of which were single family homes (the rest were some type of multifamily construction such as duplexes, apartments or condos). There are just under 140 million housing units in the US, so the US added roughly 1% to it’s housing stock last year (ignoring homes that were removed from the housing stock). These housing units are overwhelmingly built using light framed wood construction - 90-95% of single family homes and 70% of multifamily units consist of light framed wood.