Single-family home building is slowing in the suburbs as home buyer preferences for the suburbs have eased after the early months of COVID-19, according to the first quarter NAHB Home Building Geography Index (HGBI). The first quarter HBGI shows building in “most other regional geographies” are also slowing, according to the NAHB.
Supply-chain challenges and unfavorable economic conditions have reduced the pace of single-family residential construction across all regional submarkets. The effect was most pronounced in high-cost areas such as large metro suburban counties, with growth decreasing from 18.7% in the first quarter of 2021 to 5.2% in the first quarter of 2022. Large metro core counties by contrast experienced the smallest growth reduction for that period, a 0.7 percentage point decline to 8.8%. Micro counties were the only submarket to post an increase in the growth rate from the first quarter of 2021, a 3.9 percentage point increase to 16.7%.
Market share changes also reflected the slowdown of large metro suburban counties’ single-family construction. On a four-quarter moving average, year-over year basis, large metro suburban counties’ single-family construction’s market share dropped from the first quarter of 2021 by 1.3 percentage points to 24.8%. Large metro core counties’ market share dropped by 0.3 percentage points to 16.6%. All other regions, which can be grouped as “lower-density submarkets,” captured the above market share decreases. Large metro areas’ outlying counties’ market share increased the most, by 0.5 percentage points to 9.6% and non-metro, non-micro counties increased the least, by 0.1 percentage points to 4.2%. It deserves noting that the latter category has historically maintained this market share, only wavering by 0.1 percentage points downward in most quarters.
