Study: Some Sun Belt States Are Falling Behind on Home Permitting

Some Sun Belt states are lagging behind other states in permitting new homes, according to a Realtor.com report, which noted that in an era of strained housing affordability, new-home construction is key to easing the housing shortage.

Some states are building faster than others. For example, South Carolina, Idaho, and North Carolina lead the nation in permitting new homes, according to data from the Lied Center for Real Estate at the University of Nevada, Las Vegas. UNLV looked at U.S. Census Bureau data encompassing the first eight months of this year compared to 2025.

The study found that the more affordable Midwest was stagnant, according to the report.

But in the Sun Belt, some states are falling behind, the study noted. UNLV said it found slowing permitting activity in Texas, Arizona, Utah, and Oklahoma.

Home Permits Fell Nationally

“The supply side will determine what housing or rent prices people will face in 18 to 24 months,” study Co-Author Nicholas Irwin said. “And through political action, community members can encourage more development and put pressure on elected leaders to become accountable for rising housing prices.”

According to the study, new permits fell nationally in September—5.2% month over month and 7.4% year over year to an annualized 1.22 million units.

Realtor.com said builders in some of those markets are relying on concessions to attract more buyers, but that there is no question their confidence is shaken in such a difficult housing market.

For the first nine months of the year, overall new-home sales are 2.9% below 2025, Realtor.com senior economist Joel Berner said.

Permits have been the “lone bright spot” in a lot of difficult data, Berner said.

Realtor.com noted that housing affordability was top of mind in many swing states this year. Democrats and Republicans both said they favor reforms that make it easier to build homes.

State laws this year could lead to permitting of more homes, especially accessory dwelling units, Realtor.com said.

Building Permits and Affordability

UNLV said it based its study on permits per resident.

In total, cities issued 968,187 housing permits nationwide, or about 2.83 per 1,000 residents. Realtor.com said that’s essentially flat from the same period in 2025, but it’s a 4.1% drop from the same time in 2023.

South Carolina topped the study, permitting 6.07 units per 1,000 residents, a 5% increase from where it was one year ago, UNLV said. Idaho followed at 6.4 units per 1,000 residents, and North Carolina was third at 5.77 units per 1,000 residents.

Those three states also topped a recent Realtor.com report on top new-construction markets.

“These states combine fast-growing economies with favorable new-construction environments to bring homebuyers a larger share of new builds on the market,” Berner said.

Florida, Texas, and Arizona are still in the top 10 states by number of permits, but they have slowed the pace of permitting. Rhode Island, New York, and Massachusetts are near the bottom in the number of permits, Realtor.com noted, but they have recorded notable jumps in how many homes they permit.

Nevada Shows Biggest Drop

Realtor.com said that overall, 26 states and the District of Columbia permitted more homes compared to the same time in 2025. It said the other 24 states permitted fewer. The biggest drops came in Nevada, whose permit-to-resident ratio is down 29%, and Vermont and Connecticut, which both dropped 18%, Realtor.com noted.

According to Realtor.com, Nevada, which permitted 12,662 units in 2025 and 8,986 this year, joins North Dakota in permitting fewer homes than its projected household growth.

Roughly 64% of the permitted units are single-family, and 3.5% are two- to four-unit homes. The remaining 32% of homes are multifamily of five or more units.