Pandemic Led to Shift in Home Building From Large Metro Core Areas to Low-Density and Low-Cost Markets

The latest National Association of Home Builders (NAHB) Home Building Geography Index (HBGI) reports that home building activities have moved to low-density and low-cost markets since the beginning of the COVID-19 pandemic. This has led to a decline in single-family construction in large metro core and inner suburbs between Q4 2019 (pre-pandemic) to Q2 2022 from 44.5% to 41.6%.

NAHB’s HBGI shows that single-family home building in outer counties in large and medium sized metros has expanded to a 19% market share in Q2 2022, up from 17.4% in the pre-COVID period. Meanwhile, the market share of new single-family constructions in rural areas increased from 9.4% to 10.4%.

Similar decentralizing trends also hold for multifamily home building from Q4 2019 to Q2 2022. This market share increased from 17.4% to 19% in large and small metro outer markets and inched up from 28.8% to 29% in small metro core counties. In contrast, the market share slipped from 44.5% to 41.6% in large metro core and inner suburbs.