Residential Real Estate News
COVID Drove New Home Construction to U.S. Suburbia in 2020
According to the National Association of Home Builders, the suburban shift in U.S. home building stemming from the COVID-19 pandemic fears - as first reported in last year's Q2 NAHB Home Building Geography Index -- continued throughout the rest of 2020.
Single-family construction continued to over perform in suburbs, exurbs and rural communities, according to fourth quarter HBGI data released today. This continuing trend is a direct result of the pandemic; as more workers were able to telecommute and preferences shifted favoring larger homes, these changes prompted buyers and renters to seek out more affordable markets in order to accommodate home offices, home gyms and specialty rooms.
"Housing was one of the few economic bright spots in 2020, as builders worked to meet growing demand for single-family and multifamily housing, particularly in more affordable, smaller metro areas," said NAHB Chairman Chuck Fowke. "Housing can continue to be an engine of job creation and help the economy move forward in 2021. But in order to do so, policymakers need to address rising regulatory burdens and sharp increases in lumber and other building material prices that are harming housing affordability."
"Over the past three quarters, the HBGI data has revealed a measurable shift in home building from more costly, large metro areas to more affordable markets," said NAHB Chief Economist Robert Dietz. "We expect only a partial reversal of these trends this year as nationwide vaccination efforts significantly ramp up in the months ahead."
Fourth quarter HBGI data reveal a clear shift in the geography of home building:
- Outlying counties of smaller metro areas experienced a 20.7 percent growth rate for the year;
- Small metro core areas posted a 15.7 percent annual growth rate;
- Large metro suburbs registered a 15.1 percent yearly gain; and
- Large metro core areas (close-in residential areas) posted the slowest gain, with just a 9.1 percent growth rate.
