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New home construction slows in most metro communities

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New home construction slowed in most Des Moines-area communities during the first three months of 2022, with 850 building permits issued, 17% fewer than the 1,023 issued during the same period a year ago.

Of the communities surveyed by the Business Record, just Altoona, Clive, Johnston, Norwalk and West Des Moines issued more residential building permits during 2022’s first quarter compared with the first three months of 2021. Ankeny, Bondurant, Des Moines, Grimes, Indianola, Pleasant Hill, Urbandale, Waukee and Polk County all issued fewer residential permits.

Rising rates for home mortgages are pushing some buyers out of the market. Last week, the average rate for a 30-year-fixed mortgage was 5.27%, its highest point since 2009, according to Freddie Mac. A year ago, the average rate was 2.96%.

The rising cost of materials for new construction is increasing the cost of a newly constructed house. In addition, a growing number of materials are taking weeks if not months to be delivered to job sites, causing some builders to build fewer houses than a year ago.

In the first quarter of 2021, the average value of a residential building permit in the Des Moines area was $260,231. In the first quarter of 2022, the average value was $285,603, 10% more than a year ago.