{"id":3469,"date":"2022-09-06T15:22:02","date_gmt":"2022-09-06T15:22:02","guid":{"rendered":"https:\/\/preprod.realtrends.com\/blog\/2022\/09\/06\/homebuilders-now-targeting-low-density-low-cost-metros\/"},"modified":"2025-03-13T02:46:41","modified_gmt":"2025-03-13T02:46:41","slug":"homebuilders-now-targeting-low-density-low-cost-metros","status":"publish","type":"post","link":"https:\/\/preprod.realtrends.com\/blog\/2022\/09\/06\/homebuilders-now-targeting-low-density-low-cost-metros\/","title":{"rendered":"Homebuilders now targeting low-density, low-cost metros"},"content":{"rendered":"\n<p>Since the onset of the COVID-19 pandemic, homebuilders have shifted from high-density, high-cost areas to lower density and lower cost areas, according to the <strong>National Association of Home Builders<\/strong> second quarter 2022 <strong>Home Building Geography Index<\/strong> (HBGI) <a href=\"https:\/\/www.nahb.org\/news-and-economics\/press-releases\/2022\/09\/shift-in-single-family-home-building-toward-smaller-markets-continues\" target=\"_blank\" rel=\"noreferrer noopener\">report<\/a> released Tuesday.<\/p>\n\n\n\n<p>The index shows that the market share for single-family home building in large metro core areas and inner suburbs has fallen from 44.5% in the fourth quarter of 2019 to 41.6% in the second quarter of 2022.<\/p>\n\n\n\n<p>Meanwhile, single-family home building in outer suburbs in large and medium sized metros has expanded from 17.4% to 19% during the same period.&nbsp;<\/p>\n\n\n\n<p>The HBGI is a quarterly measurement of building conditions across the country. It uses county-level information about single- and multifamily permits to gauge housing construction growth in various urban and rural geographies.\u00a0<\/p>\n\n\n\n<p>Experts attribute the shift in homebuilding trends to <a href=\"https:\/\/preprod.realtrends.com\/blog\/articles\/pandemic-homebuying-hotspots-at-greater-risk-for-a-downturn\/\" target=\"_blank\" rel=\"noreferrer noopener\">migration patterns<\/a> caused by the pandemic and increasing <a href=\"https:\/\/preprod.realtrends.com\/blog\/articles\/these-are-the-most-affordable-housing-markets-in-the-country\/\" target=\"_blank\" rel=\"noreferrer noopener\">housing affordability<\/a> issues.<\/p>\n\n\n\n<p>\u201cThe geography of home building has shifted over the last two and half years, with more single-family and multifamily construction occurring in lower density markets,\u201d Robert Dietz, the NAHB\u2019s chief economist, said in a statement. \u201cThis shift was first caused by the initial impact of Covid on housing demand, which favored lower density neighborhoods. The shift continued in recent months due to housing affordability conditions that are causing both prospective renters and buyers to expand their geographic search for housing, aided by hybrid work patterns that allow for a combination of remote and office work.\u201d&nbsp;<\/p>\n\n\n\n<p>This trend of decentralization holds true in the least densely populated regional markets. Single-family building market share in small metro core counties increased to 29% from 28.8% from Q4 2019 to Q2 2022, and in rural areas, the home building share rose to 10.4% from 9.4%.&nbsp;&nbsp;<\/p>\n\n\n\n<p>The multifamily market also showed a similar pattern during the same period, with the share of multifamily construction in large metro core areas falling from 41.7% in the fourth quarter of 2019 to 39.3% in the second quarter of 2022.\u00a0\u00a0<\/p>\n\n\n\n<p>\u201cLooking at the last 12 months, single-family production has slowed in all regional submarkets, both large and small, due to ongoing <a href=\"https:\/\/preprod.realtrends.com\/blog\/articles\/are-homebuilders-too-pessimistic\/\" target=\"_blank\" rel=\"noreferrer noopener\">building material production bottlenecks, construction labor shortages<\/a>, and the Federal Reserve\u2019s <a href=\"https:\/\/preprod.housingwire.com\/articles\/purchase-mortgage-rates-rise-to-5-66\/\" target=\"_blank\" rel=\"noreferrer noopener\">tightening monetary policy<\/a>,\u201d NAHB chairman Jerry Konter said in a statement.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A report from the NAHB found that homebuilders have shifted from high-density, high-cost areas to lower density and lower cost areas.<\/p>\n","protected":false},"author":34740,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[1760],"class_list":["post-3469","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.4 (Yoast SEO v26.8) - 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