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Exurban Areas Post Largest Residential Construction Gains

By Randolph Sturdivant | Dec 19, 2023
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Findings from the NAHB Home Building Geography Index—a quarterly measurement of building conditions across the country—reveal that for the third quarter of 2023, single-family growth rates were negative for all geographic sectors of the nation.

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2023 has shown a marked slowdown in single-family home construction. Findings from the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI)—a quarterly measurement of building conditions across the country—reveal that for the third quarter of 2023, single-family growth rates were negative for all geographic sectors of the nation.

The market dip appears to be driven by several factors, including “Rising mortgage rates, elevated construction costs and chronic construction labor shortages,” according to Alicia Huey, NAHB chairman.

However, there is a bit of holiday cheer wrapped up in the report. Multifamily construction continues to show positive growth trends in exurban areas, which are defined as large areas at the edges of a metropolitan area. The majority of this exurban home building is taking place in areas of higher income.

The metro outlying communities saw “a ninth consecutive quarter of positive growth while nonmetro/micro counties registered positive growth for the 11th straight quarter,” Huey said. This translates into a growth rate of 37.9% in multifamily units. The highest was in the third quarter.

In the meantime, large and small metro areas posted double-digit negative growth rates, peaking in a third quarter decline of 18.6% in small metro core counties.

This isn’t to say that single-family home building is an area that shouldn’t be of focus for industry participants. While single-family is down across the board, exurban areas did show a modest 0.2% increase in market share between the second and third quarters.

Taken in totality, Robert Dietz, NAHB’s chief economist, feels that HGBI data “continues to show that home building has slowed, but there are signs that it is beginning to turn a corner heading into the end of the year”

About The Author

Randolph Terrance Sturdivant is an SPJ award-winning, Emmy-nominated, freelance writer and comedian living in a Virginia suburb of Washington, D.C. He is a prolific writer with stories covering a range of emotion and subjects. Reach him at [email protected]

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