Exurban Areas Saw Most Growth in New Construction During Q3

While the U.S. has seen negative quarterly growth rates in single-family home building for all geographic markets since the beginning of 2023, exurban areas posted the largest increase in market share for both single-family and multifamily construction, according to the latest findings from the National Association of Home Builders' (NAHB) Home Building Geography Index (HBGI). The index is a quarterly measure of housing construction growth across the U.S. based on county-level information about single- and multifamily permits in various urban and rural geographies.

Small metro core counties saw the lowest single-family year-over-year growth rates in Q3 of 2023, declining 18.6%, according to NAHB's Eye On Housing. In contrast, large metro outlying counties saw the biggest increase (9.5% to 9.7%) in single-family market share between Q2 and Q3 of 2023.

“The HBGI data continues to show that home building has slowed, but there are signs that it is beginning to turn a corner heading into the end of the year as the Federal Reserve has paused rate hikes as inflation continues to slow,” said NAHB Chief Economist Robert Dietz.

Dietz added that new analysis using personal income per capita estimates from the Bureau of Economic Analysis coincides with the geographic HBGI data which shows single-family and multifamily home construction has become more concentrated in outlying areas instead of urban centers. “Counties with higher incomes that tend to be more urban have lost home building market share in both the single-family and multifamily sectors,” he said.

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