Single-Family Large Metro Construction Slowed in 2019

According to the National Association of Home Builders (NAHB), fourth quarter Home Building Geography Index (HBGI), large metro suburbs were down 1.4% over the year and their core counties made only a small recovery from the negative performance in the previous quarter. These higher cost markets suffered due to higher mortgage interest rates at the start of 2019. Together, large metro areas make up about 45% of the market share for single-family homebuilding. On the other hand, over the course of 2019, exurbs outside medium-sized cities, i.e., outlying counties of small metro areas, performed best at 2.9% growth rate. Small towns (micro counties) performed next best at 2.8%, although this region represents only 6% of single-family starts. The gains in these regions owe to cheaper land and lower regulations, thus making development easier.