According to the Q3 edition of the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI), the shift of single-family construction to suburban areas, brought on by the onset of the COVID-19 pandemic last year, continues unabated. However, the HBGI notes that more urban core markets are in the process of making a comeback. This has occurred as more workers transition back to the workplace.
The gap that proportionately favored lower density locations in 2020 closed somewhat in 2021 thanks to a rebound for building in higher density communities. For example, the four-quarter moving average for large metro core areas single-family permit growth between the third quarter of 2019 and 2020 was 5.6%, while exurbs grew at twice that rate (12.3%).
However, moving forward year, the new permit rate of growth in this same four-quarter period between 2020 and 2021 increased to 21.1% for large metro core markets and 30.8% for the exurbs, reducing the proportional gap between the growth rates. Nonetheless, exurbs of large metros recorded the highest growth rate of all geographies.
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