The National Association of Home Builders reported a higher demand for home construction in lower-density areas during the second quarter. That demand has only accelerated through the third quarter. Both single-family and multifamily construction performed the strongest in areas such as the suburbs or more rural exurbs. In just the second quarter, the Home Building Geography Index’s urban core share of single-family home building dropped 0.3%, according to NAHB.
Regional shares of single-family and multifamily homebuilding have been shown to change composition slowly over time (making a one percentage point change in the four-quarter moving average of a market share over a single year is noteworthy). For both single-family and multifamily building, the ability of individuals and families to live further from urban cores is empowering consumers to acquire housing with more space at a lower cost.
Suburbs of medium-sized cities posted the greatest single-family gains in the third quarter per the HBGI, with a 15 percent growth rate over the last four quarters.