The National Association of Home Builders' (NAHB's) quarterly report on building conditions around the country adds more data to the conventional wisdom that homebuyers are looking to move out of the cities in growing numbers. Of the seven regional geographies the trade group uses in its Home Building Geography Index (HBGI), "small metro area suburbs" showed the largest jump, up 10.6% on a four-quarter moving average basis, the trade group said in the newly released second-quarter report.
That was followed by micro county (small towns) at 9.3%, small metro core county at 7.5%, large metro outlying areas (exurbs) at 5.6%, large metro suburban county at 4.5%, non-metro micro county (rural) at 4.3%, and large metro core county at 3.9%
Small metro area suburbs also were the only category up year over year, as single-family housing starts were down 24% compared to the same three months (April-May-June) last year, the NAHB said.
The HBGI uses county-level information about single- and multifamily permits to gauge housing construction growth. A link to the full HBGI index showing market share and growth for single-family and multifamily construction across all seven geographies is available on this NAHB web page.
Coronavirus outbreak driving the bus to the burbs
The pandemic is the reason, the NAHB said, backing up extensive reports from listing services and media reports about city residents looking to the suburbs and beyond.
"The increasing demand for construction in more-suburban neighborhoods is being driven in large part by the coronavirus outbreak," NAHB Chairman Chuck Fowke, a custom homebuilder in Tampa, Florida, said in a Sept. 1 press release. "The growing trend for working at home is enabling more families to choose to live in lower-cost, lower-density communities."
The market share for single-family construction in low-density areas (small metro core and suburbs, small towns. and rural markets) ticked up about 1 percentage point to 48.4%, the report said.
Meanwhile, the fastest-growing geographies for apartment construction in the second quarter were in the exurbs, small metro suburbs, and rural areas, the report said. Those low-density geographies' market share rose from 32.9% a year ago to 34.0% for the second quarter this year.
"Although the year-to-year changes in single- and multifamily market share in low-density areas are seemingly small, changes in market share are usually slow to develop," the report concluded. "This makes a one percentage point year-over-year gain noteworthy when compared to recent historical data."