'Blue' counties lag 'red' ones for housing construction says NAHB

The builders association says that land use rules must be addressed

'Blue' counties lag 'red' ones for housing construction says NAHB

An analysis of housing construction across the US has uncovered a red/blue divide.

The National Home Builders Association says that in the fourth quarter of 2019, 61% of single-family construction was in red counties (those that voted for Trump in the last election) while 64% of multifamily construction was in blue counties (those that voted Clinton).

However, red counties saw a 1.7% growth for single-family home construction compared to a 1.2% decline in blue counties, while for multifamily there was a 21% rise for red counties and a 8% gain for blue counties.

“The lack of housing supply and inventory is the primary challenge facing housing markets nationwide, and are key factors why the nation is struggling with a housing affordability crisis,” said NAHB Chairman Dean Mon. “This latest HBGI data reveals that red counties are outpacing their peers in blue counties, despite almost two-thirds of apartment construction occurring in blue areas. The analysis highlights the importance of land use rules and development costs in determining the amount of home construction that takes place in communities across the US.”

Supply challenges
NAHB Chief Economist Robert Dietz added that supply issues remain in high-growth, high-cost markets, despite increases for permits issued at the end of 2019 for both single-family and multifamily sectors.

“The lagging performance of single-family construction in blue counties, combined with the 2019 declines for home building in large metro suburban areas, highlight this affordability challenge, which is a source of frustration for younger households in high-cost markets.”

Other findings
NAHB’s quarterly Home Building Geography Index also reveals that:

  • Single-family construction continues to lag in manufacturing areas, posting a 1.6% decline over the course of 2019, compared to a slight gain for the rest of the nation.
  • Single-family construction is growing the fastest in small metro, outlying areas (small metro suburbs), while it continues to decline in traditional suburbs of large metro areas (1.4% decline)—the worst performing region for single-family.
  • Multifamily construction posted gains in all regions by the end of the year.