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Home construction is slowing down in Florida for the second straight year, according to permitting data in a new study.
The study, from real estate search company Point2, found that 193,192 permits were issued in the state last year, a 9% decrease from 2022. Permits for buildings with more than five units fell 13%.
The news that fewer new homes are in the pipeline is concerning given rapid population growth that is already creating havoc in the market, as a lack of inventory is driving housing costs up and pushing people out.
Despite Florida’s drop, it remains ranked among the top three states in the number of permits issued for new homes. It joined California and Texas in issuing more than 100,000 permits last year, the report found.
The hardest hit major metro market in the state was Tampa-St. Petersburg, where permits for new homes fell 15.24%. Among Florida’s three other major markets, permits for new homes fell 12.44% in Jacksonville, 11% in Orlando and 7.65% in Miami-Fort Lauderdale.
In Naples, considered a smaller metro, permits dropped 34.15%.
The study’s head analyst, Bogdan Cristea, writes that the drop in Florida could make an already tough housing market event tougher and “might only add fuel to a fire that could end up burning many people's homeownership dreams.”
What’s happening is not unique to the state. Permits fell in 70% of U.S. metro markets last year, according to the study, with Rochester, New York; Seattle-Tacoma-Bellevue; and San Antonio-New Braunfels, Texas, seeing permits fall more than 30% year over year.
“The downward trend was much more pervasive last year compared to 2022, when permitting activity declined in 63% of metros,” Cristea writes. “These numbers can affect future homebuyers in a very real way. Coupled with the fact that developers are also reducing their activity, which means fewer new homes on the market, it could signal even harder times to come.”
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