Large Metro Markets Show Biggest Slowdown in Single-Family Construction


By Jesse Wade on September 5, 2023 • Rising mortgage rates and elevated construction costs have taken a toll on the pace of single-family construction in markets across the nation, with the slowdown most pronounced in large metro areas. Multifamily market growth also fell in most areas of the country, according to the latest findings from the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI) for the second quarter of 2023. Across the single-family market, the 4-quarter moving average of the year-over-year growth rates remained negative for all markets in the second quarter of 2023. Between the second quarter of 2022 and the second quarter of 2023, the growth rates across all markets fell double digits, with the largest change in growth rate occurring in Large Metro – Outlying Areas. With all single-family growth rates continuing to be negative for the second consecutive quarter, the largest percentage decrease in building was in Large Metro – Core Counties at negative 24.8%. Micro Counties was the only market to post a single digit percentage decline at negative 8.7%. Over the past four years rural markets have exhibited strength. The rural (Micro Counties and Non Metro/Micro Counties) single-family home building market share has increased from 9.4% at the end of 2019 to 11.7% by the second quarter of 2023. The combined market share for Large Metros (Core, Suburban, Outlying) remained below 50% for the second consecutive quarter as it was unchanged at 49.8%. The multifamily market started to show signs of cooling down in the latest release of the HBGI. The year-over-year moving average growth rate for four of the seven markets fell into negative territory. Large Metro – Outlying Counties, Micro counties and Non Metro/Micro counties all remained positive. Non Metro/Micro counties had the highest growth at 26.6% while Large Metro – Core Counties was the lowest at negative 10.6%. The multifamily market share for Large Metro – Core Counites dropped 1.2 percentage points between the first and second quarter of 2023, falling from 38.6% to 37.4%. The largest increase in market share between the quarters was in Large Metro – Outlying Counties which increased 0.6 percentage points from 26.4% to 27.0%. The second quarter of 2023 HBGI data can be found at Related ‹ July Gains in Private Residential Construction SpendingTags: HBGI, home building, home building geography index, multifamily, single-family

Large Metro Markets Show Biggest Slowdown in Single-Family Construction2023-09-05T08:33:15-05:00

Homeownership across US Counties


While US homeownership rates have been rising since 2015 and received an extra boost during the post-pandemic housing boom, they remain below the levels reached during the housing boom of the mid-2000s. With the national trends reflecting fundamental drivers of homeowners, local markets often tell different and unique stories. NAHB’s analysis of the 2021 5-year ACS county-level data reveals substantial variation in homeownership rates across US counties, ranging from less than 25% in urban counties of New York to over 90% in exurban counties of Denver and in the South. The geospatial analysis of cross-county variation in homeownership rates reveals a familiar geographic pattern with high cost of living coastal areas registering some of the lowest homeownership rates. Within California, for example, homeownership rates in coastal Monterey and Santa Barbara are below 53%. At the same time, homeownership rates in High Sierra counties of California approach and exceed 80% (Alpine, Calaveras, Sierra, Amador, El Dorado). Population density also helps explain substantial variation in homeownership rates across US counties. Urban high-density counties register some of the lowest rates. Four core urban counties in the New York metro area appear in the bottom ten homeownership rate list – Bronx (19.8%), New York County (24.7%), Kings County (30.7%), Hudson County (32.3%). In California, the lowest homeownership rates are in San Francisco County (38.2%) and Los Angeles County (46.2%). In the Washington DC metro area, the three core central counties register homeownership rates below 43% – District of Columbia (41.5%), Arlington County (42.3%), Alexandria city (42.9%). At the same time, its outlying Madison and Calvert Counties show homeownership rates of 82.4% and 85.3%, respectively. Counties on the top ten list register homeownership rates in excess of 90%. The list includes four counties in the Mountain division. Two are in the Denver metro area – Elbert County (92.6%) and Park County (91.1%) – as well as Storey County, NV (96.5%), Meagher County, MT (92.1%). Out of the remaining six highest homeownership rate counties, five are in the south (Terrel County, TX, Cameron Parish, LA, Powhatan County, VA, Washington County, AL, Doddridge County, WV). While the counties with highest homeownership rates are spread through out the country, the common feature is that these are all outlying lower density counties. Using NAHB’s Home Building Geography Index (HBGI) delineation confirms that the highest home ownership rates are registered by exurban counties, averaging slightly above 75% for this geographic grouping. High-density core counties in large metro areas register a considerably lower average home ownership rate of about 54%, with less dense core urban counties of small metro areas showing an average homeownership rate of 65%. Related ‹ Single-Family Permits Decline in May 2023Tags: county estimates, exurban homeownership rates, HBGI, homeownership by county, homeownership rates, urban homeownership rates

Homeownership across US Counties2023-07-18T08:16:21-05:00

Single-Family Building Focused around Baby Boomers: Multifamily is Millennial Focused


NAHB analysis of county level permit data and demographic data indicates that single-family home building in the first quarter of 2023 is occurring mostly in counties where baby boomers make up a majority of the population. The Census Bureau provides county level population age estimates in 5 years intervals. For example: 0-4, 5-9, 10-14 through 85+. Using these estimates, we can segment county populations into six distinct generations and determine which generation has the highest population share in each county. The generations used in the analysis are defined as follows: Generation Alpha (Ages 0-9), Generation Z (10-24), Millennials (25-39), Generation X (40-54), Baby Boomers (55-74) and the Silent Generation (75+). Based on the Census data, the Baby Boomer generation has the majority share of population in 2,605 counties. Surprisingly, Gen Z already has the majority share of population in 335 counties while millennials are the majority share in 179. Gen X, the often-overlooked generational group, is the majority share of population in a mere 24 counties. The silent generation and Gen Alpha make up the majority share in no counites. Single-family home building since 2016 has predominantly been in areas where Baby Boomers are the largest present generation. Below is the single-family home building market share by dominant-generation-by-county dating back to 2016. The Boomer market share has been increasing since the fourth quarter of 2019, when it stood at 52.6% of the single-family construction market. As of the first quarter of 2023, the Baby Boomer market share has increased 5.5 percentage points to 58.1% market share. All other generations have lost market share by this measure over the same period, with Millennials market share falling from 29.1% to 24.7%, Generation X falling from 4.6% to 4.3% and Generation Z falling from 13.7% to 12.8%. Despite millennials making up the majority share of population in just 179 counties, these counties have the largest market share of overall multifamily building. Since 2016, counties where millennials make up the largest share of population have been the leaders in multifamily building with their market share never falling below 52.0% over the 7-year span. As of the first quarter of 2023, areas where millennials make up the largest share of population accounts for 52.3% of multifamily home building. Baby Boomers make up the next highest market share at 35.5% while Generation Z has a market share of 9.4%. Generation X has the smallest market share of only 2.8% of the multifamily building market. Related ‹ New Home Sales Jump in MayTags: Baby Boomers, gen-x, Gen-Z, HBGI, HBGI Featured Topic, market share, Millennial, multifamily, single-family

Single-Family Building Focused around Baby Boomers: Multifamily is Millennial Focused2023-06-28T09:14:37-05:00

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