Sioux Falls details second-best building year on record

Jan. 14, 2026

Sioux Falls building activity exceeded $1.3 billion in 2025, representing the second-strongest year on record.

It was led by commercial activity, including multifamily development, which represented $1 billion of the total.

That compares with a total of $1 billion in 2024 and $1.1 billion in 2023. It lags behind only 2022, which brought $1.9 billion in building activity.

“2025 actually ended on a fairly high note,” Mayor Paul TenHaken said Wednesday at a news conference announcing the total, pointing out it’s the fifth consecutive year the city has exceeded $1 billion in building activity.

Since he took office in 2018, permits have totaled $9 billion, with $6.5 billion in commercial activity and $2.5 billion in residential building.

Commercial construction in 2025 was led by “a nice mix of projects,” said Jeff Eckhoff, director of planning and development services.

Here’s a look at the top 10 largest projects:

The mix indicates a healthy, diversified market, Eckhoff said.

“It represents … a nice mix of amenities, a nice mix of business, a nice mix of public infrastructure projects.”

Single-family housing construction hit its lowest level in years, totaling 357 new homes, compared with 532 in 2024 and 421 in 2023.

“It was a lower year for single-family residential,” Eckhoff said. “There’s a lot of things going on with the market.”

Higher interest rates, combined with owners in homes with low mortgages not wanting to move, have contributed, he added.

“Supply is down, and there’s some waiting going on I think, too, with regards to what’s going to happen in the market.”

Sioux Falls added nearly 2,000 living units in 2025, slightly behind 2,150 in 2024 and 2,682 in 2023.

New owner-occupied townhomes totaled 403 last year, compared with 344 in 2024 and 331 in 2023.

“Homeownership for young people today really might be more of a townhome or a condo or more of a place to start than a traditional single-family home,” Eckhoff said.

The multifamily market totaled 1,168 new units in 2025, compared with 1,256 in 2024 and a record total of 3,343 in 2022.

“We came off a real peak,” Eckhoff said, adding that apartments are getting absorbed, which will lead to more construction.

In 2026, “we’re seeing a couple projects that are good size in the queue now,” he said, adding that banks, engineering and architecture firms are reporting “a little slower start, but they’re starting to see their pipeline fill up for the second half.”

Here’s an interactive map of noteworthy building permits that were issued in 2025.

Business leaders look to 2026 with optimism, while project pipeline has yet to come into focus

The post Sioux Falls details second-best building year on record appeared first on SiouxFalls.Business.