Authored by James Clary, Economist
The May 2013 U.S. Census metropolitan housing permits release indicates that single family permits are being issued at a slowly increasing rate in Hampton Roads, from 227 units in March to 270 units in May.* This level of permitting remains far below the long term average of 493 permits per month; the region was last above the average in October 2006. This is another indication that the housing industry has not recovered and is at least a few months from recovery, and this lack of recovery derives from both tighter lending requirements and a still weak job market which has stalled new household formation.
During the winter, economists speculated that developers would attempt to capture rising rent levels by investing in multifamily housing units, which would boost the construction industry. Unfortunately, that did not come to pass in Hampton Roads. Regional multifamily permits have declined precipitously on both a seasonally adjusted and unadjusted basis over the past three months, going from over 400 units to 40 units per month (it should be noted that historically there exists a high degree of variability in the level of multifamily permitting making it an unreliable economic indicator). Construction employment is down 2 jobs since May 2011 and 16 jobs since May 2007.
*These numbers have been adjusted to account for the seasonal nature of housing permits. On an unadjusted basis, the Hampton Roads Metropolitan Area issued 311 permits, up from 219 in March.