Residential Real Estate News
Single-Family Construction Shifting Away from Large U.S. Population Centers
According to new research by the National Association of Home Builders for the fourth quarter of 2022, while single-family housing starts slowed nationwide in 2022, the largest drop on a percentage basis is occurring in the densest counties, where housing costs are highest. Meanwhile, multifamily growth was robust throughout much of the nation at the end of 2022, with the notable exception in high-density markets.
"While the largest single-family market continues to be core counties of large and small metropolitan areas, the urban core market share has fallen compared to pre-Covid levels," said NAHB Chairman Alicia Huey. "During the fourth quarter of 2019, urban core markets of small and large metro areas represented 47.2% of the single-family market. This share declined to 44.5% in the fourth quarter of 2022, representing a persistent shift in buyer preferences to live outside of densely populated areas."
The largest growth in single-family market share came in rural markets (micro counties and non-metro micro counties), rising from 9.4% in the fourth quarter of 2019 to a share of 11.8% in the fourth quarter of 2022.
"Due to aggressive federal reserve monetary policy and high mortgage rates, all submarkets in the HBGI posted lower single-family growth rates in the fourth quarter of 2022 than a year earlier," said NAHB Chief Economist Robert Dietz. "Rural areas were the only market with a positive single-family home building growth rate in the final quarter of 2022."
The fourth quarter HBGI shows the following market shares in single-family home building:
- 16.0% in large metro core counties
- 24.7% in large metro suburban counties
- 9.5% in large metro outlying counties
- 28.5% in small metro core counties
- 9.5% in small metro outlying areas
- 7.4% in micro counties
- 4.4% in non-metro/micro counties
Separately, the multifamily construction market remains elevated above historical levels, with six of the seven submarkets experiencing growth rates above 15% during the final quarter of 2022. However, large metro core counties were an outlier and registered the smallest growth rate, up only 1.5% from the fourth quarter of 2022.
