While the COVID-19-driven suburban shift for single-family home building is continuing, new data reveals that higher-density markets are making a comeback as well, according to the third quarter NAHB Home Building Geography Index (HBGI). There were gains for housing production in both urban core and exurban areas due to workers transitioning back to the workplace, according to the NAHB’s Eye on Housing blog.
Comparing the four-quarter moving average of the year-over-year growth rates of the third quarter of 2020 to that of 2019 shows a resurgence of single-family home building in all regional geographies tracked by the HBGI.
But the gap that proportionately favored lower density locations in 2020 closed somewhat in 2021 thanks to a rebound for building in higher density communities. For example, the four-quarter moving average for large metro core areas single-family permit growth between the third quarter of 2019 and 2020 was 5.6%, while exurbs grew at twice that rate (12.3%).
But jumping ahead a year, the new permit rate of growth in this same four-quarter period between 2020 and 2021 increased to 21.1% for large metro core markets and 30.8% for the exurbs, reducing the proportional gap between the growth rates.
