There's increasing demand for construction in suburban neighborhoods, driven largely by COVID-19
There’s growing evidence of a suburban shift in consumer home-buying preferences as a result of the COVID-19 pandemic, according to the National Association of Home Builders’ latest Home Building Geography Index (HBGI).
“The increasing demand for construction in more suburban neighborhoods is being driven in large part by the coronavirus outbreak,” said NAHB Chairman Chuck Fowke. “The growing trend for working at home is enabling more families to choose to live in lower-cost, lower-density communities. Moreover, persistent housing affordability challenges exacerbated by soaring lumber prices that have added $16,000 to the price of a single-family home since mid-April are adding to the need to find affordable housing in lower-cost markets.”
“The county-level second quarter HBGI data shows relative growth in lower-density markets that represent half of all single-family construction,” said Robert Dietz, NAHB chief economist. “We saw initial evidence of this trend in the first quarter, and in recent months these markets have registered faster growth for both single-family and multifamily building, as the demand for new construction shifted to more suburban and exurban communities.”
The HGBI is a quarterly measurement of building conditions across the country. It uses county-level information about single-family and multifamily permits to gauge housing construction growth in both urban and rural areas.
During the second quarter, small metro suburbs accounted for the fastest growing geographical single-family construction, up 10.6% on a four-quarter moving average basis, NAHB said. This was followed by small towns (9.3%), small metro core areas (7.5%) and exurbs (5.6%).
On a national level, single-family housing starts fell by 24% quarter over quarter. Of the seven regional geographies measured by the HBGI, only small metro area suburbs posted a year-over-year gain in the quarter, while the others posted declines.