WASHINGTON, DC — New findings from the National Association of Home Builders’ Home Building Geography Index (HBGI) show a shift in home building activity over the past 30 months, with a notable slowing in large, metro urban areas, the NAHB reported.
The shift, according to the Washington, DC-based NAHB, is the result of initial COVID- related migration effects followed by declines in housing affordability in high-cost and highly regulated markets as interest rates increased.
“The geography of home building has shifted over the last two and a half years, with more single-family and multifamily construction oc- curring in lower-density markets,” said NAHB Chief Economist Robert Dietz. “This 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,” Dietz added.
Looking at the past 12 months, single-family production has slowed in all regional submar- kets, both large and small, due to ongoing building material production bottlenecks, construction labor shortages and the Federal Reserve’s tightening monetary policy, the NAHB said.