As Homebuyer Demand Wanes, Single-Family Construction Is Slowing
Single-family homebuilding surged in large metro outlying counties and exurban areas post-pandemic, but in the wake of high mortgage rates and persistent home price gains, that trend is slowing, NAHB reports. Home building activity has slowed in nearly every region of the U.S. as consumer demand wanes, and markets which were once targets for new-construction projects are seeing the biggest changes.
NAHB’s Q3 Home Building Geography Index (HBGI) revealed that large metro outlying counties (exurban areas) saw the most significant 12-month decline in single-family production, falling from a growth rate of 31.9% in Q3 2021 to a minus 4.4% rate in Q3 2022.
Smaller metro outlying counties also saw a significant deceleration, registering a 30.6% percentage point drop for its growth rate during the same period. Urban core areas in both large and small metro areas also posted negative growth rates during this time frame.
Rural counties, including micro counties and non-metro/micro counties, were the only counties to post a positive year-over-year growth rate.