Single-family construction continues to ramp up in low-density, more affordable markets to meet demand, but the National Association of Home Builders says this trend is even stronger with multifamily construction. After a decline in construction during 2020, multifamily construction has bounced back during the first quarter of 2021. Multifamily construction declined 67% but that share increased to 63.4% from the last quarter of 2020 to the first quarter of 2021. The increase in apartment construction in small metro areas came at the expense of large metro core and suburban counties, says NAHB.
For single-family home building, the suburban shift was less amplified but evident nonetheless: the market share for large metro core counties declined from 18 percent in the first quarter of 2020 to 16.9 percent in the first quarter of 2021. Outlying counties (outer suburbs) of large and small metros expanded from 17.2 percent to 17.9 percent. The strongest quarterly gains were experienced in outlying counties of large and small metro areas, by 20.3 percent and 21.7 percent, respectively, and in rural counties by 20.3 percent. These three regional classes constitute 22 percent of single-family residential construction’s market share. Large metro core areas showed the slowest growth rate at 9.7 percent, a positive rate but a relative laggard.
The NAHB forecast assumes some rollback of housing demand to medium density markets, particularly during the second half of 2021. This rollback can be seen in recent strength for townhouse construction.