New findings from the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI) show that the rate of year-over-year single-family construction growth in small and large metro urban, suburban and rural regional submarkets slowed in the first quarter of 2022 compared to the same time period as last year, with notable deceleration in large suburban markets. In contrast, multifamily growth in large population centers has rebounded from negative growth rates and posted sharp gains during the same time period.

“As the year has progressed, we have seen signs of an increasing slowdown in the single-family market,” said NAHB chairman Jerry Konter, a home builder and developer from Savannah, Ga. “Ongoing building material production bottlenecks have delayed or stalled home building projects, construction labor shortages are running near an all-time high of 400,000 workers and more recently the rapid run-up in mortgage rates have all combined to exacerbate the housing affordability crisis.”

“Single-family growth rates have slowed in nearly all regional submarkets over the past year due primarily to rising construction costs that have seen building material costs rise 19 per cent year-over-year,” said NAHB chief economist Robert Dietz. “The more pronounced drop in growth for the large suburban markets is due to the easing of the rapid shift of home buyer preferences for the suburbs in the aftermath of the COVID-19 pandemic.”

On the multifamily front, Dietz noted that apartment construction growth is far outpacing single-family building in all regional geographies. “Low rental occupancy rates and rising rents give multifamily developers confidence to continue building despite rising costs for land, labor and materials,” he said.

The HBGI is a quarterly measurement of building conditions across the country and uses county-level information about single- and multifamily permits to gauge housing construction growth in various urban and rural geographies.

Key findings from the first quarter HBGI show that four-quarter moving average single-family growth rates in:

  • Large metro suburban counties fell the sharpest, from 18.7 per cent in the first quarter of 2021 to 5.2 per cent in the first quarter of 2022.
  • Large metro core counties very marginally slowed down from 9.5 per cent in the first quarter of 2021 to 8.8 per cent in the first quarter of 2022.
  • Micro counties (small towns) was the only region to post an increase in growth, a 3.9 percentage point increase to 16.7 per cent.

The first quarter HBGI shows the following regional market shares in single-family home building:

  • 16.6 per cent in large metro core counties.
  •  24.8 per cent in large metro suburban counties.
  •  29.2 per cent in small metro core counties.
  • 18.8 per cent in outlying counties of large and small metro areas.
  • 10.6 per cent in rural areas.

The multifamily market tells a different story, as the HBGI’s submarkets in multifamily home building showed the following increase in growth between the first quarter of 2021 and the first quarter of 2022 for large and small markets:

  • Large metro core counties solidly recovered from a negative 3.6 per cent growth rate to a positive 17.4 per cent rate.
  • Large metro suburban counties sharply rebounded from a negative 9.5 per cent growth rate to a positive 31.4 per cent rate.
  • Low density counties posted an increase from a 5 per cent growth rate to a 37 per cent rate.

The first quarter HBGI finds that 36.9 per cent of multifamily development occurred within large metro core areas, 25.8 per cent in large metro suburbs, 23.5 per cent in small metro core areas and 13.7 per cent in other submarkets.

Sign Up for Our Newsletters

Get notified of our top breaking news

You May Also Like

The European sawmill industry is skeptical about Q3/2022

The first months of 2022 were very positive for the industry thanks…

More sawmill closures expected in British Columbia in 2023

A series of federal and provincial government policies that are deliberately squelching…

China: Timber imports fall in Q1/2023; prices follow the trend

In the first quarter of this year, China’s total timber imports reached…

After steep drop, lumber prices recover somewhat: Madison’s

Published / Reported by CANADIAN FOREST INDUSTRIES Jennifer Ellson Source Article EXCERPT…