The single-family housing market continues to shift from large, densely populated areas due to high housing costs. Overall, the four-quarter moving average of year-over-year growth in the single-family market has fallen considerably since the fourth quarter of 2021, according to the fourth quarter 2022 Home Building Geography Index from the NAHB.
The largest decrease in the growth rate [for the single-family market] was in Large Metro – Outlying Counties, which fell from 23.6% in the fourth quarter of 2021 to -12.1% in the fourth quarter of 2022. All markets had a positive growth rate in the fourth quarter of 2021 but only Micro Counties remained positive in the fourth quarter of 2022 at 6.8%.
The market share in the single-family market has consistently been changing since the pandemic. As many families move out of densely populated urban centers, there has been more single-family building in outlying areas of metros, small metros, and non-metro areas. The largest increase in market share since the fourth quarter of 2019 was in Micro Counties, where the share increased from 6.0% to 7.4% in the fourth quarter of 2022. The largest decrease in single-family market share was in Large Metro – Core Counties, which fell 2.4 percentage points from 18.4% to 16.0%.
Meanwhile, the multifamily construction market remains elevated above historical levels, with six of the seven submarkets experiencing growth rates above 15.0% during the final quarter of 2022. However, Large Metro – Core Counties were an outlier and registered the smallest growth rate, up only 1.5% for the fourth quarter of 2022.
