In the third quarter of 2023, single-family and multifamily home construction grew in outlying areas instead of urban centers.
That’s according to the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI). Released quarterly, the HBGI gauges housing construction growth in various regions using county-level information about single- and multifamily building permits.
Outlying counties of large metro areas, as well as non-metro/micro counties, posted a ninth and an eleventh quarter of positive growth, respectively. From Q2 to Q3 2023, the single-family, new-construction market share grew the most in large metro outlying counties from 9.5% to 9.7%.
Outlying counties posted the highest growth rate in the multifamily sector as well. Meanwhile, single-family construction growth rates in small metro core counties declined 18.6% in Q3 2023 from a year ago.
Overall, all large and small metro areas posted double-digit negative growth rates. Even wealthy counties that tend to be more urban have “lost home-building market share in both the single-family and multifamily sectors,” NAHB Chief Economist Robert Dietz said in a statement.
The bulk of home building is in high-income areas
Both the single-family market and the multifamily market posted bigger home-building gains in high-income areas.
The market share for single-family construction in counties with the highest personal income quintile (greater than $62,212) was 40.8%, down from 45% in Q3 of 2018. Meanwhile, 61% of all multifamily construction was in counties with the highest income quintile.
