Multifamily building continues to overshadow single-family new builds as challenges in supply chains and affordability persist in the housing construction industry, according to the latest data from the National Association of Home Builders (NAHB).
NAHB’s Home Building Geography Index (HBGI) for both Q3 and Q4 2025 (delayed due to government shutdown) saw drops in single-family construction across the board for almost all metros, except for in low-density, low-populated micro counties. On the other hand, however, multifamily construction saw large growth across the board.
“While single-family homebuilding continues to face challenges across most of the nation, multifamily construction strengthened across every region in the fourth quarter following two years of uneven performance,” said NAHB Chief Economist Robert Dietz.
The HBGI is a quarterly measurement of building conditions across the country and uses county-level information about single-family and multifamily permits to gauge housing construction growth in various urban and rural geographies. Data is tracked across the regions as follows:
- Large metros: Core county, suburban county, outlying areas
- Small metros: Core county and outlying county
- Micro county
- Non metro/micro county
“The HBGI data highlights how affordability and space needs are driving home construction toward lower-density markets,” noted NAHB Chairman Bill Owens.
Single-family construction’s year-over-year growth rates saw falls in almost all regional segments:
- Large metro core counties: -8.9% in Q3 and -12.8% in Q4
- Large metro suburban counties: -7.2% in Q3 and -9.2% in Q4
- Large metro outlying counties: -3.3% in Q3 and -8.2% in Q4
- Small metro core counties: -3.8% in Q3 and -6.4% in Q4
- Small metro outlying areas: -3% in Q3 and -3.7% in Q4
- Non-metro/micro counties: -1.4% in Q3 and -2.3% in Q4
As previously mentioned, micro counties saw the only increase in single-family construction in Q3 and Q4, rising 3.3% and 1.6%, respectively.
Also of note, the 12.8% decline in core county large metros was the largest year-over-year four quarter moving average seen since 2023.
In terms of multifamily construction, the picture painted by the Q3 and Q4 year-over-year growth rates is much brighter:
- Large metro core counties: -2.3% in Q3 and +7.8% in Q4
- Large metro suburban counties: +5.5% in Q3 and +6.1% in Q4
- Large metro outlying counties: +2.3% in Q3 and +1.9% in Q4
- Small metro core counties: +5% in Q3 and +9.3% in Q4
- Small metro outlying areas: +8.7% in Q3 and +11.6% in Q4
- Micro counties: 24.6% in Q3 and 14% in Q4
- Non-metro/micro counties: +11.0% in Q3 and +6.9% in Q4
“Growth returning to large metro core counties coupled with sustained construction in smaller markets signals a more balanced and geographically diverse multifamily sector heading into 2026 than in years prior,” added Dietz.
The report also noted that the “new status quo of higher levels of multifamily construction in smaller, less-densely populated areas remains.”
The lean toward multifamily construction follows the overall national trend, as the latest New Residential Construction report saw single-family starts fall 2.8% month-over-month and 6.5% year-over-year, while multifamily starts shot up 29.1% month-over-month and 56.9% year-over-year.
Owens noted at the time of that report that “builders continue to deal with elevated construction costs while affordability conditions are a cause of concern for many potential homebuyers.”
Market share between single-family and multifamily construction remain mixed:
| Single-family construction market share | Multifamily construction market share | |
| Large metro core counties | 15.1% | 35.1% |
| Large metro suburban counties | 24.2% | 26.4% |
| Large metro outlying counties | 9.3% | 3.7% |
| Small metro core counties | 29.4% | 25.1% |
| Small metro outlying areas | 10.5% | 4.9% |
| Micro counties | 6.9% | 3.5% |
| Non-metro/micro counties | 4.5% | 1.2% |
