Building permits for new residential construction are on the rise in both Alabama and the United States. In Alabama, July permits increased 10.3 percent year-over-year from 1,159 one year ago to 1,278 currently. Year-to-date through July, permits in Alabama are up 6.8 percent from 8,404 to 8,975. Nationwide, July permits increased 11.9 percent year-over-year from 101,005 one year ago to 113,033 currently. Year-to-date through July, permits in the United States are up 7.8 percent from 729,109 to 785,903. This increase in permit activity indicates that demand for new residential construction remains strong even as costs for builders, and sales prices for consumers, are rising. Increased building costs include rising interest rates, higher prices for undeveloped land, and price increases in key building materials including lumber and roofing shingles. Sales prices for new construction are increasing but at a slower rate than material price increases, suggesting that builders are operating with tighter margins than previous years. The year-to-date median sales price of a newly constructed home in Alabama increased 2.1 percent from $229,913 one year ago to $234,627 currently.
The top five counties with the most year-to-date building permits through July are: Madison County, Baldwin County, Jefferson County, Lee County, and Shelby County. Baldwin County experienced the most growth with a 16.3 percent increase, while Shelby County was the only top 5 market to witness a decline in permits with a drop of 5.7 percent.
Top 5 Counties With The Most New Construction Permits in 2018 (YTD Through July)
Madison County continues to lead the state in new construction activity with 1,655 building permits year-to-date (YTD) through July, an increase of 12.1 percent from one year ago. Year-to-date new construction sales in the Huntsville metro area increased 5 percent year-over-year from 995 to 1,045 closed transactions. Year-to-date median sales price for new construction in the Huntsville area increased 1.3 percent year-over-year from $258,991 to $262,389.
Baldwin County continues to experience strong demand for new housing as new construction building permits increased 16.3 percent YTD through July versus one year ago. Year-to-date new construction sales in the area increased 70.2 percent year-over-year from 601 to 1,023 closed transactions. Year-to-date median sales price for new construction in Baldwin County decreased 1.2 percent year-over-year from $250,458 to $253,423.
Jefferson County experienced slight growth in YTD new construction building permits as they are up 2.4 percent from one year ago. Year-to-date new construction sales in the Birmingham metro area increased 12.1 percent year-over-year from 1,085 to 1,216 closed transactions. Year-to-date median sales price for new construction in the Birmingham metro area increased 4.4 percent year-over-year from $263,238 to $274,850.
Lee County continues to be a hot market for new construction as YTD building permits increased 11.1 percent from 592 to 658. Year-to-date new construction sales in Lee County increased 16.3 percent from 300 to 349 closed transactions. Year-to-date median sales price for new construction in Lee County increased 9.4 percent from $279,030 to $305,252. Lee County is the only new construction market in the state to have a year-to-date median sales price above $300,000.