Recent reports from the National Association of Home Builders (NAHB) claim home building activity in suburban and lower-cost markets saw a second-quarter uptick, particularly in multi-family housing.
NAHB released its Home Building Geography Index (HBGI)—a quarterly measurement of building conditions across the country—on Sept. 7, showing double-digit gains in multifamily construction in small metro core and suburban areas in the second quarter of 2021. Single-family home building also posted double-digit gains, according to the HBGI.
The breakdown:
– Q2 multifamily residential construction grew by 18.3% from the previous quarter and up 88.9% YoY (Q2 2021 vs. Q2 2020)
– Multifamily building activity increased by 14.3% in small metro urban cores and 25.5% in small metro suburban areas in Q2
– Multifamily construction posted a 48.3% gain YoY in the “most affordable” regions of the country, according to HBGI
– Single-family construction posted a 43.9% quarterly growth rate in the most affordable counties—up 29.9% YoY
– 45.8% of single-family construction occurred in large and medium-sized metros—down 1.2% in market share
What this means:
“The trend of construction shifting from high-density metro areas to more affordable regions, which accelerated at the beginning of the pandemic early last year, appears to be continuing.
Lower land and labor costs and lower regulatory burdens in suburban and exurban markets make it more appealing to build in these communities. , workers are increasingly flocking to these areas due to expanded teleworking practices and lower housing costs.” — Chuck Fowke, NAHB Chairman
“There was a marked increase in new apartment construction outside large metro areas as people have greater flexibility to live and work in more affordable markets. Similarly, for the single-family sector, the HBGI data revealed that construction growth occurred more proportionally in these more affordable areas as well, while declining in terms of market share in the most expensive counties. However, overall single-family starts have slowed in recent months largely because of rising prices and limited availability of a broad range of key building materials.” — Robert Dietz, NAHB Chief Economist
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news ideas to jgrice@rismedia.com.
