Home Building Remains Strong Through Third Quarter

According to the Home Builders Association of F-M’s third quarter permit report, new housing activity remains steady compared to this time last year. With 923 housing permits taken through the end of September, the F-M metro community encompassing Dilworth, Moorhead, Fargo and West Fargo experienced a 1 percent increase compared to last year’s 917 housing permits, and an 8 percent increase in value, coming in at nearly $216.5 million.

HBA President Tom Spaeth, Accent Contracting, says, “Through second quarter, housing permits were down about 7 percent compared to last year, so the industry made a strong push from July through September to bridge that gap, despite a little rainy weather during that period.”

Single-family homes increased by 127 permits community-wide, while twin-home and town house construction decreased. Third quarter saw 12 duplex permits for 24 units, while the past two years have had none. Housing permit values grew by over $15.5 million. Residential remodeling permits and value both increased, 6 percent and 17 percent, respectively.

“In the past 15 years, single-family homes have only cracked the 700-permit level through third quarter three times: in 2004, 2013 and now in 2016,” Spaeth says. “It just goes to show that the different types of housing tend to increase and decrease depending on available land to build, demand and other factors.”

Housing Types Through Third Quarter

Through September.xlsx

Dilworth – Last year at this time, Dilworth had 24 housing permits. This year it had 21 permits valued at over $4.7 million, which is a 13 percent decrease in number of permits and a 28 percent decrease in value. The city had no twin home, town house or duplex permits. Residential remodeling permits increased 15 percent.

Moorhead – Moorhead’s construction year is lagging with 146 housing permits. Last year’s housing permits through third quarter, at 181, set the bar high and were the best since 2007. Part of last year’s surge came from builders applying for twin home permits before Minnesota’s code requiring fire sprinklers became effective. The city’s housing permits were down 19 percent over last year’s numbers at this time. Moorhead’s residential remodeling permits were up 3 percent through third quarter.

Fargo – At 363 permits, Fargo saw a 1 percent decrease in new housing permits over the last year. Residential remodeling rose 3 percent.

West Fargo – West Fargo’s housing permits increased 13 percent compared to third quarter last year, with 393 housing starts. Residential remodeling increased 16 percent.

“West Fargo is the only community that experienced an increase in overall housing permits through third quarter,” Spaeth says. “It’s worth highlighting that the city had a downturn at this time last year, compared to the other cities. Again, this is an example of our community’s tendency to see fluctuations across cities based upon various factors.”

January – September Housing Permits

Through September.xlsx

Overall – Compared to third quarter last year, total building permits increased 6 percent (3,745), and total value was up 7 percent ($715.3 million). Total permits and values include housing, multi-family, new commercial, residential and commercial remodeling, public and miscellaneous categories.

Spaeth says, “Overall housing starts are up, but multi-family, new commercial and public permits are lower than last year. The good news is that commercial remodeling permits and value are back to 2014 levels, while new commercial value is up considerably over last year. Many of those large projects permitted in 2014 and 2015 are now complete, allowing new projects to be started.”

Each quarter, the HBA contracts with Fiebiger, Swanson, West & Co. to compile the building permits from Dilworth, Fargo, Moorhead and West Fargo into a uniform report for the industry’s and media’s use. It includes summaries for each city, types of construction, valuations and comparisons to the past three years.

The HBA of F-M promotes an environment in which members and their businesses can prosper. It is a non-profit trade association of nearly 900 members that has been in existence since 1956: 2016 marks the Association’s 60th anniversary. Its public events include the Spring Parade of Homes, Fall Parade of Homes, Remodeled Home Tour and Red River Valley Home & Garden Show.