Building permits for single-family homes in Bismarck, North Dakota, jumped 137% in June compared with a year earlier, KFYR reported. Contractors filed more than 150 of them, trying to refill a depleted stock of housing.
The permit count suggests a market responding to demand. The price tells a different story, because the surge has not made buying any cheaper. The average sale price of a single-family home in the city recently passed $484,000, which is $18,000 more than a year ago. First-time buyers face prices close to half a million dollars and stiff competition for the few entry-level homes on offer.
Why owners are staying put
Dot Frank, a real estate agent with Better Homes and Gardens Real Estate, described the imbalance. “While we have people who are aging into homeownership, we have far fewer people who are putting their house on the market,” she said.
She puts much of it down to mortgage rates locked in during the pandemic. Soon after COVID, rates fell far enough that a house could be financed for under 3%. A seller who then buys again has to finance at today’s rate. “The rate could be twice as high,” Frank said. “So, no one wants to spend more money on a house and more money to finance the house, so people are tending to stay put a lot longer than they have in the past.”
New construction has helped fill the gap left by homes that never reach the market, but high labor and material costs keep prices up.
A tight, fast market
Sellers face their own worry. They want a quick sale, Frank said, but if a house sells too fast they begin to wonder whether they priced it too low.
Realtors in the Bismarck-Mandan area tell buyers to get pre-approved before they start looking and to be ready to make an offer immediately, because inventory remains exceptionally tight.
