Residential single-family home permits in metro Detroit during April fell 28 percent to 371 filings as compared to March, when builders pulled 517 permits, according to a new report from the Home Builders Association of Southeastern Michigan in Bingham Farms.
Looking back to April 2019 when COVID-19 wasn’t around, builders pulled 498 single-family permits, which was 26 percent higher as a seasonal comparison to April 2021. The Home Builders Association covers Oakland, Wayne, Macomb, and St. Clair counties.
The trailing 12-month total for the 4-county area was at its highest level (4,729) since June 2019 (4,761).
“The increase in lumber prices nationwide has clearly had a detrimental effect on new home construction permits,” says Michael Stoskopf, CEO of the Home Builders Association. “Just in the month of April, the price for softwood lumber — the primary material in nearly 30 percent of the products used to construct a single-family home, according to the National Association of Home Builders (NAHB) — rose by over 48 percent in just 30 days.
“Compared to April 2020, lumber prices have increased over 400 percent, or by a factor of five. NAHB estimates that this has increased the cost to build a single-family home by at least $40,000. This increased cost subsequently prices many southeastern Michigan households out of the market, resulting in builders pulling fewer permits. The downturn of April permit numbers here in the region is consistent with nationwide numbers.”
While Macomb, Oakland, and St. Clair counties were all down compared to April 2019, bucking the trend was Wayne County with its 105 single-family home permits, the best since April 2006 (237).
Construction material pricing escalation continues to be a concern for the HBA’s permit activity forecast. On May 7, lumber prices reached an all-time high ($1691.73 per thousand board feet or Mbf) and as of May 20closed at a price about 7 percent lower than the end of April.
With the stagnation in the number of people employed, along with ongoing supply chain challenges affecting automotive production to oil prices and construction materials, HBA is forecasting plateaued activity for the next six months.
The Home Builders Association reports the average single-family permit value was $340,059 in April, up 5.6 percent from March and a 31-percent increase from April 2020.