Large metro markets see biggest housing slowdown

Home Featured Post Large metro markets see biggest housing slowdown

Washington, D.C.—Rising mortgage rates and elevated construction costs have taken a toll on the pace of single-family construction in markets across the nation, with the slowdown most pronounced in large metro markets. Multifamily market growth also fell in most areas of the country, according to the latest findings from the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI) for the second quarter of 2023.

“While the pace of single-family construction posted a year-to-year decline in all the small and large geographic markets measured by the HBGI between the second quarter of 2022 and 2023, we expect these levels have bottomed out,” said NAHB chairman, Alicia Huey, a custom home builder and developer from Birmingham, Ala. “Single-family production should register growth in the months ahead as the Federal Reserve nears the end of its tightening cycle and mortgage rates begin to stabilize.”

NAHB chief economist, Robert Dietz, added, “The latest HBGI data continue to show a changing geography for home construction. Multifamily and single-family construction have shifted to lower-density markets, with market share gains for those types of markets. This is especially true for apartment construction, which has seen a segment share decline for large metro areas as development shifts to the suburbs and exurbs.”

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

The lowest single-family year-over-year growth rates in the second quarter of 2023 occurred in large metro core counties, which posted a 24.8% decline. All large and small metro areas also had double-digit negative growth rates, while rural markets (defined as micro counties and non-metro counties) recorded negative growth rates in the single digits.

As single-family building levels have declined, the most pronounced drop-off has been in the combined market share of large metro areas (defined as core, suburban outlying). The total market share for these areas is 49.8%—a data series low—after falling for seven consecutive quarters prior to remaining unchanged from the first quarter of 2023.

Breaking down the seven metro and county areas, the second quarter HBGI shows the following market shares in single-family home building:

  • 15.8% in large metro core counties
  • 24.6% in large metro suburban counties
  • 9.4% in large metro outlying counties
  • 28.5% in small metro core counties
  • 9.9% in small metro outlying areas
  • 7.2% in micro counties
  • 4.5% in non-metro/micro counties

In the multifamily sector, only three markets had positive growth rates in the second quarter of 2023:

  • 26.6% in non-metro/micro counties
  • 15.9% in large metro outlying counties
  • 3.1% in micro counties

Meanwhile, large metro core counties posted the lowest multifamily production growth rate of any market at -10.6%. This marks the third consecutive quarter where this geographic area registered the lowest growth rate.

In terms of market share in the multifamily arena, the large metro core counties fell from 42.2% in the first quarter of 2020 before the pandemic hit to 37.4% in the second quarter of 2023.

Must Read

Emser Tile releases 2024 catalog

Los Angeles—Emser Tile has released its 2023/2024 catalog, available both in print and online. The newly released 450+ page resource offers an extensive and varied...

Latest innovations in subfloor solutions

Most professional installers would agree the ultimate success of any flooring installation largely depends on the condition of the subfloor that lies beneath. To that...

AHF announces exclusive partnership with Spartan Surfaces

Mountville, Pa.—AHF Products has entered into a strategic agreement with Spartan Surfaces, effective September 21, 2023. Spartan Surfaces will have exclusive distribution for the...

FCEF awarded federal grant for installation training

Dalton—The Floor Covering Education Foundation (FCEF) has been awarded a federal grant to fund installation training programs at several colleges in Alabama over the...

‘Tuesday Tips:’ 5 steps to prepare for severe weather Dalton—The World Floor Covering Association (WFCA) released a new “Tuesday Tips” this week. In the series, WFCA experts presents short video tips for improving customer service...

Decocer to exhibit at Cersaie 2023

Bologne, Italy—Decocer, which specialized in the design and manufacture of small-size ceramic pieces, will participate once again in Cersaie with new designs this year....
Some text some message..