Single-family home building growth slowing in large suburbs

Home News Single-family home building growth slowing in large suburbs

Washington D.C.—New findings from the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI) show that the rate of year-over-year single-family construction growth in small and large metro urban, suburban and rural regional submarkets slowed in the first quarter of 2022 compared to the same time period as last year, with notable deceleration in large suburban markets. In contrast, multi-family growth in large population centers has rebounded from negative growth rates and posted sharp gains during the same time period.

“As the year has progressed, we have seen signs of an increasing slowdown in the single-family market,” said NAHB chairman, Jerry Konter, a home builder and developer from Savannah, Ga. “Ongoing building material production bottlenecks have delayed or stalled home building projects, construction labor shortages are running near an all-time high of 400,000 workers and more recently the rapid runup in mortgage rates have all combined to exacerbate the housing affordability crisis.”

“Single-family growth rates have slowed in nearly all regional submarkets over the past year due primarily to rising construction costs that have seen building material costs rise 19% year-over-year,” said NAHB chief economist, Robert Dietz. “The more pronounced drop in growth for the large suburban markets is due to the easing of the rapid shift of home buyer preferences for the suburbs in the aftermath of the COVID-19 pandemic.”

On the multi-family front, Dietz noted that apartment construction growth is far outpacing single-family building in all regional geographies. “Low rental vacancy rates and rising rents give multi-family developers confidence to continue building despite rising costs for land, labor and materials,” he said.

The HBGI is a quarterly measurement of building conditions across the country and uses county-level information about single and multi-family permits to gauge housing construction growth in various urban and rural geographies.

Key findings from the first quarter HBGI show that four-quarter moving average single-family growth rates in:

  • Large metro suburban counties fell the sharpest, from 18.7% in the first quarter of 2021 to 5.2% in the first quarter of 2022.
  • Large metro core counties very marginally slowed down from 9.5% in the first quarter of 2021 to 8.8% in the first quarter of 2022.
  • Micro counties (small towns) were the only region to post an increase in growth, a 3.9 percentage point increase to 16.7%.

The first quarter HBGI shows the following regional market shares in single-family home building:

  • 16.6% in large metro core counties
  • 24.8% in large metro suburban counties
  • 29.2% in small metro core counties
  • 18.8% in outlying counties of large and small metro areas
  • 10.6% in rural areas

The multi-family market tells a different story, as the HBGI’s submarkets in multi-family home building showed the following increase in growth between the first quarter of 2021 and the first quarter of 2022 for large and small markets:

  • Large metro core counties solidly recovered from a negative 3.6% growth rate to a positive 17.4% rate.
  • Large metro suburban counties sharply rebounded from a negative 9.5% growth rate to a positive 31.4% rate.
  • Low density counties posted an increase from a 5% growth rate to a 37.0% rate.

The first quarter HBGI finds that 36.9% of multi-family development occurred within large metro core areas, 25.8% in large metro suburbs, 23.5% in small metro core areas and 13.7% in other submarkets.

Must Read

Housing affordability falls to lowest level since Great Recession

Washington, D.C.—Rising mortgage rates, high inflation, low existing inventory and elevated home prices contributed to housing affordability falling to its lowest point since the...

AFA dissolves, donates $135,000 to GNTC

Dalton—Due to pandemic-related revenue shortfalls and event cancellations, the American Floorcovering Association (AFA) board of directors voted to dissolve the advocacy organization, according to...

Cali launches Cali Rugs collection

San Diego—Cali is launching Cali Rugs, a new collection of area rugs designed to complement the omni-channel company’s flooring and decking. Customers looking to...

Crossville recognized as eco-leader

Crossville, Tenn.— Crossville was recently recognized as an eco-leader by Green Builder Media. Crossville said its commitment to sustainability is the standard bearer for...

How to better leverage Instagram in business

In the realm of social media, Instagram remains one of the staple platforms alongside Facebook, Twitter and the newest member—TikTok. Since its launch in...

Daltile launches Lava Finish

Dallas, Texas—Daltile has developed the Lava finish, a unique, proprietary finish for quartz surfaces that creates the most realistic, natural stone feel available on...
Some text some message..