Midwest housing construction boom defies national downturn

New residential construction is booming in the Midwest — even as it falls nationwide.

Freshly authorized building permits skyrocketed in the region in May by 16 percent from the year prior and nearly 10 percent from the month before, according to the U.S. Census Bureau. Those are the greatest growth rates among the country’s four main geographic areas. (Data is seasonally adjusted.)

The Midwest’s growth stands in contrast to what is happening at the national level. In May, residential permits slipped by 1 percent year over year to 1.4 million permits, a nearly five-year low when construction ground to a halt during the pandemic. Compared to the month before, authorized permits are down by 2 percent.

Economic uncertainty, labor shortages, rising costs and high interest rates are a few of the factors that have tempered construction activity in the U.S.

The population in the Midwest grew in 2024 compared to 2023, but below the national growth rate. International migration accounted for much of the increase, according to the Council of State Governments Midwestern Office.

The region also notched the fastest-growing apartment rents in the country in May. Outdoor space, proximity to family and friends and remote work are some of the drivers of those who have migrated to the region, according to a report from the National Association of Realtors. Oklahoma and Ohio ranked among the top 10 states in 2023 for net migration.

Permit issuing in the South and West — regions that have experienced population, and therefore residential construction, booms of late — fell the most from the year before, by nearly 5 and 3 percent, respectively, the data show.

The South, which in 2023 drew in more people than all the other U.S. regions combined, per CSG, still recorded the greatest number of permits issued, 743,000, among the four regions. However, that’s the region’s lowest amount since the start of the pandemic in 2020.

In the Midwest, 213,000 permits were authorized, the second-lowest amount after the generally land-constrained Northeast.