High Demand, Low Supply Leads to Decreased Permit Numbers
NDIANAPOLIS (March 18, 2022) – The Builders Association of Greater Indianapolis (BAGI) has announced that in Central Indiana’s nine-county area, single-family building permits are down 15% over February 2021, with 669 permits issued last month compared to 818 the year prior.
The association stated this is more of an ongoing and increasing supply issue and not consumer demand. In fact, demand has and continues to keep the inventory of newly built and existing homes in Central Indiana at record lows.
Low supply, coupled with high demand, leads Central Indiana to see a 15% decrease in single-family building permits
“The supply chain issues and labor shortages our industry has been facing has now been compounded with another serious challenge of not having enough lots in the market areas consumers most prefer,” Steve Lains, CEO of BAGI, said. “We’re hearing from most builders that it is still difficult to find the materials and labor needed to build a home right now. Couple those ongoing issues with a very limited supply of lots and meeting consumer demand, which has not slackened, and it becomes a difficult challenge for everyone in the industry and market today.”
Lains added that lot supply was an emerging issue in 2021, but the same supply chain and labor issues that are adding time to the home construction process impacted the lot development sector creating a situation in which lots that were scheduled for completion in 2021 and 2022 were not completed as anticipated. Missing many of those lot completion timelines has now become an additional factor in new home supply falling short of the continued strong demand in the market. Builders are working diligently to address these issues and encourage consumers to recognize that the new home construction industry is no different than the other consumer sectors of the economy impacted by supply and labor shortages.
Despite an overall decrease in permits issued in Central Indiana, Hendricks County saw a 53 percent with 176 permits issued last month compared to 115 issued in February 2021.
Hendricks County saw a 53% increase in building permits from February 2021.
Permit Breakdown by County:
|County||2021 Permits (Jan – Feb)||2022 Permits (Jan – Feb)|
The Builders Association of Greater Indianapolis is a professional trade association representing residential homebuilders, associates and remodelers. For more information, call 317-236-6330; or visit www.BAGI.com/permits/for permits numbers from 2000-2022.