High-Density Markets, Larger Homes Seen Rebounding

by Anita Shaw

WASHINGTON, DC — The suburban shift for single-family home buying precipitated by the COVID-19 pandemic continues, although data reveals that higher-density markets “are making a comeback,” according to the National Association of Home Builders.

The latest NAHB Home Building Geography Index, released late in 2021, found that as more workers transitioned back to the workplace, there was a rebound for housing production in urban core markets, as well as ongoing growth in exurban areas.

“Although all geographies are showing construction growth, the suburban shift is less pronounced than in prior quarters, as some higher-density markets rebound even as exurbs continue to expand,” said NAHB Chief Economist Robert Dietz. On the multifamily front, an opposite trend is occurring, with apartment construction in lower-density markets growing even faster as high-density markets lose market share, Dietz said.

The NAHB reported that new-home sizes are also increasing in size, with COVID-19 sparking “an increased desire for space to accommodate added functions such as working from and/or studying at home.”

Citing the latest government data, the NAHB said that median single-family square floor area increased to 2,337 sq. ft., while average square footage for new single-family homes increased to 2,541. Those metrics have increased 9.3% and 6.2%, respectively, since Great Recession lows, the NAHB noted.

 

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